AOL's shares may be up significantly in the past several months, but the company's future is far from certain.
Under CEO Tim Armstrong's reign, the company has invested heavily in content. Last year, it purchased The Huffington Post for $315m and the year prior, it paid eight figures for popular tech blog TechCrunch. The company's tab for its homegrown Patch reportedly stands at more than $150m, with profitability nowhere in sight.
How to compete with Google in the display advertising space? Late last year, three unlikely allies, Yahoo, AOL and Microsoft, forged a pact that would allow each company to sell certain display ad inventory for the others.
At the time, Yahoo and Microsoft decided to use different ad exchanges, while AOL remained undecided.
In 2007, Tim Armstrong was the head of Google's North American ad sales, making him one of the company's most important and powerful executives.
He was also very interested in local content, and disappointed by the lack of information about his hometown, helped start Patch Media, a company dedicated to building a network of local news and information.
After Armstrong became CEO of AOL in 2009, AOL purchased Patch and started funneling money into the network with plans to establish a footprint in hundreds of cities.
Yesterday's surprise announcement that AOL is buying The Huffington Post for $315m sent shockwaves through the blogosphere.
The deal is not only one of the biggest in the consumer internet space
in the past several years, it's one of the biggest online publishing
acquisitions ever involving a 'blog'.
Make no doubt about it: AOL CEO Tim Armstrong had his work cut out the
moment he became the leader of one of the most storied names in
technology in the past two decades.
The former head of ad sales for Google is tasked with nothing less than
to revitalize a brand that in many ways represents what the internet
once was, and perhaps represents little of what most of us think it will
be. Increasingly, Armstrong's task looks impossible to carry out
According to CEO Tim Armstrong, AOL is probably the largest newsroom in the world. With a staff comprised of 4,000 journalists, it's hard to quibble with that estimation.
But over the next year, AOL will have to make a lot of changes if it wants to follow through on its new brand promise to "beat the internet."
Coming to an established brand with new ideas is one thing. But
convincing existing employees to change old habits is an entirely different issue. And that's increasingly a problem at AOL, where Tim Armstrong came from Google
11 months ago.
At the offices of brand strategists Wolff Olins in New York on Tuesday morning, AOL's CEO laid out the cultural shift that he is still trying to overcome:
"AOL was so used to losing that they didn't know what winning was."
The CEO of newly-independent AOL, Tim Armstrong, knows that AOL's future is not its past. But that doesn't mean AOL can't recapture some of the glimmer it's lost over the years.
In an effort to accomplish that, Armstrong is changing AOL's its focus by, well, getting focused.
AOL's new CEO Tim Armstrong has been quickly buying up talent and increasing AOL's media properties in the lead up to the company's tkt from parent Time Warner later this year.
At the Roosevelt hotel in New York today, Armstrong went into AOL's continuing strategy.
AOL's CEO announced that online content can be "much better."
"That's why we are making such a big bet there," he said during a
keynote appearance at the annual Media and Money conference, hosted
by Nielsen and Dow
It's true that content online has a long way to go. But is AOL the one to make it happen?
AOL's new CEO Tim Armstrong has spent the past few months reorganizing the company and snatching up unemployed journalists. Under the former Google exec, AOL has gotten more headlines for its publishing business than its advertising platform, and according to Armstrong that should continue.
Speaking at the IAB MIXX conference in New York Monday, Armstrong laid out his plans: AOL wants to be the Disney of the digital era.