AOL Looks to Local Advertisers & Social Media for Revenue Boosts

Nov 02, 2011

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In a recent Q3 earnings report and call with shareholders, AOL CEO Tim Armstrong was positive, stressing the benefits of the company's acquisition of The Huffington Post and the success of its local news network AOL Patch-which the company hopes to expand from 500 sites to 1,000 sites.

Interestingly, though, Armstrong also talked about the company's expansion into more local advertising efforts. EContent has covered Patch extensively, and one of the questions I've often had is how a local news site can survive without local advertisers. Armstrong said, "When you talk to major auto makers, half goes into local and regional," and continued to say AOL will also be focusing more on local retailers as the company endeavors to make Patch profitable.

Also on AOL's collective mind is the Facebook threat. "Without commenting on Facebook specifically, I've met with a number of CMOs at major companies and the sense is that buyers are going with a few bigger partners," said Armstrong. "That benefits AOL, Google, Facebook. One of the largest buyers expects to spend his ad dollars on the top 20 properties, mimicking the cable advertising world."

With Facebook looming large, it should be no surprise that he closed the call with a brief but telling mention of plans for a social networking tool of AOL's own. But as we've seen with Google+, there isn't unlimited room for new social networks. It will be interesting to see whether AOL partners with Facebook for integration or spends its money on an entirely new tool.