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Posts Tagged ‘Tim Armstrong’

AOL Boosts Earnings As Revenues Slide

new aol logo blobWith today’s Q4 earnings report from AOL, we can say that the internet provider has truly become a media company: it’s in that funny* stage where even though revenues are continuing to slide, the company can show a positive trend on the earnings side—in AOL’s case accomplished by the sole fact that it didn’t have any restructuring costs this quarter.

So while revenues fell 26% year over year to $596 million (down from $806 million), profits were up 108 percent to $67 million.

“I am very proud of what we accomplished in 2010 as we began the year with a significant restructuring of AOL and ended the year with a significantly improved balance sheet, a number of exciting new products and a new culture focused on winning,” chairman and CEO Tim Armstrong said in a statement.

Some highlights:

  • Patch ended the year in 775 towns, up from 559 at the beginning of the fourth quarter.
  • AOL’s subscription revenue still makes up a healthy chunk of AOL’s business: about 40 percent of its revenues come from subscribers to AOL’s internet service, though revenue in that segment fell 23 percent year over year.
  • According to the release, AOL “remains focused on improving its content offerings internally and in partnership with premium content providers. Recently, AOL launched original web video series on, PopEater, AOL Kids, KitchenDaily and Stylelist and entered into strategic partnerships with Sporting News, Everyday Health and Move, Inc.”

*Not funny

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Patch ‘Probably Costs Too Much To Last’

Well, some bad but not particularly surprising predictions from The New Yorker’s Ken Auletta in a six-page spread about Tim Armstrong‘s attempted turnaround of AOL: the “content first” strategy that has involved hiring so many hundreds of journalists may not be working.

Data point number one: Patch, which has 750-plus locations across the country and has provided jobs to countless numbers of journalists, is too much like a “digital Yellow Pages” and not enough like, well, journalism. It also, says PaidContent, summarizing Auletta’s piece, is likely too expensive to be sustainable, at $30 million a quarter.

And since the article was written, even more data points to the idea that AOL’s strategy is not working. Last week, Armstrong announced his intention to outsource sports, health, and real estate content rather than creating it in-house. (FanHouse, AOL’s now moribund sports site, did good work breaking news soon after its launch in early 2009.)

Ask an AOL exec, however, and you won’t hear any of this. These are still third-party predictions, but keep an eye out for how they do or don’t pan out soon.

Is Still A Black Hole?

Once upon a time, almost a year ago (which is eons in Internet time), AOL launched a freelance content generating engine called Seed. It worked in a way similar to competitors like Demand Studios: assignments would be posted to an online bulletin board to be snatched up by hungry wordsmiths. (Considering that the pay, while higher than that at similar sites, is still pretty low, “hungry” may be literal as well as metaphorical.)

And the complaints almost immediately started.

“[My submissions] have all been sitting for 13 days with no response. I feel like I submitted the articles into a black hole, lol,” wrote one frustrated submitter.

And then there was this mess, when AOL CEO Tim Armstrong decided five hours before the launch of a big site that it needed to be totally redone, partially because tons of their freelance contributors missed their deadlines.

Okay, but that was very early on in the thing’s infancy, really. Those issues have been ironed out.

Read more

AOL Continues Hiring Spree, Armstrong Says Some WTF Things

We’re bewildered that AOL is continuing to hire, since the Internet content company has been in seemingly full-on hiring mode since, oh, eighteen months ago. But hey, who are we to complain?

The Daily Front Row interviewed AOL CEO Tim Armstrong about his plans for the company. Surprise, surprise: Armstrong says AOL is getting bigger, higher quality.

DFR: We hear you’re hiring hundreds of journalists over the next few months. Can we tell all our unemployed friends to send you their resumes?
Armstrong: Please, we want ‘em all! We have about 80 new content properties and are looking for people who are passionate experts in the video space, audio space, text space, every space.

He also told DFR that “starting this month, I think you’ll see our sites becoming higher and higher quality, both from an aesthetic and a functionality standpoint. The second thing you’re going to see us do is create very specific high-end versions within our existing content verticals—in the women’s space, in the travel space, and especially in the fashion space.” And in the next two months, all AOL’s sites will be remodeled and relaunched. Very cool.

Though Tim, you had us until you called the Jonas Brothers “some of the most creative people on the planet,” in the same sentence, no less, as Chuck Close. But OK. You’re hiring unemployed journalists so we’ll let that slide.

Internet Earnings: ‘Growth Company’ AOL Isn’t That, Yet; IAC Back In The Black

new aol logoIn other earnings related news today, Aol has decided it wants to be an “internet growth company,” according to CEO Tim Armstrong in the company’s Q1 earnings statement today. What that means, we don’t know, but the company is still finding its feet since spinning off from Time Warner late last year: the company reported a 58% drop in profit, to $34.7 million, on a 23% decrease in revenue ($664 million).

The company noted that it reduced expenses by $139 million, thanks to its selling-off of legacy products (like today’s announcement that it would sell ICQ as well as AOL’s plans to sell-off Bebo) and, of course, its reduction in staff.

No word yet on Seed or Aol’s other new initiatives, but it’s early yet.

In other parts of the Internet, IAC grew revenue 16 percent in Q1 2010, resulting in profits of $3.5 million, driven by ad revenue at The Daily Beast experienced growth this quarter, too, though IAC doesn’t quantify that growth. We’ll hope to hear about it in today’s earnings conference call and let you know.

AOL’s Culture Clash…And Tim, Where Do You Think This Work Is Coming From?

new aol logo blobAOL’s going to have/is already having a culture clash problem with all the ex-Google employees it’s brought on, reports Econsultancy.

CEO Tim Armstrong, a former Google employee himself, has been bringing in staffers from Google to bulk up the ranks of AOL’s staff.

The problem?

“AOL was so used to losing that they didn’t know what winning was,” Armstrong said.

Googlers are “used to giving someone a task and receiving work better than they expected,” writes Econsultancy. “At an established corporation like the old AOL, employees are used to having their work checked over….Which means that longtime AOLers may not make the cut if they don’t get with the program.”

So if you’re content-side AOL right now and you’ve been with the company a while, look sharp.

Second issue: Armstrong isn’t happy with the quality of work his team of content creators is churning out.

“I went onto the SxSW site and I was horrified,” he said of the website that was supposed to have collected Seed interviews of all 2,000 bands playing at South by Southwest. Aol employees worked overnight to get the site up to snuff.

And with healthcare being a big f*cking issue last week, he said he expected better of the health editors and writers: “We didn’t have the best coverage. It was opinions and scraping.” He said the Word and Aol employees worked to get up a breakdown of the bill pegged to location and legislator.

But dude, where do you think this work is coming from? If AOL wants to have a big content operation that isn’t “opinions and scraping,” then yes, you need to change the culture, but you have to hire a bunch more people.

Yes, Aol is going through a huge hiring boom right now, but remember that they have 87 sites to manage. That’s a lot, so if Armstrong wants instant changes, he may need to hire even more people. Which is good news for web journalists.

100 Losing Their Jobs At AOL Today, 1,000 More Cuts To Come?

aol.jpgKara Swisher reports that AOL will be cutting about 100 jobs today, in preparation for the company’s spinoff from Time Warner later this year.

We’re not sure from which departments these layoffs are coming, but we’re betting it’s not content.

The company’s placed all its eggs in the content basket and will be focusing on that for the foreseeable future.

After today’s layoff, CEO Tim Armstrong says he’s considering offering a buyout.

And after that, right around the spinoff, Armstrong will likely cut another 1,000 employees.

Best of luck to all AOLers affected.

Time Warner Inc. Posts 10% Decrease In Profits But Still Feels Like A Billion Bucks

A billion and a third, that is. Time Warner Inc. (TWX) reported a profit of $1.3 billion on revenues of $7.1 billion, leading chairman and CEO Jeff Bewkes to announce that “Time Warner is firmly on track to post solid results this year in spite of the tough economic environment.”

Revenue at Time Warner’s Publishing segment, which includes Time Inc’s 22 magazines and 25 web sites, declined 18 percent to $914 million, mainly because of declines in advertising and subscription revenues, but income fell 40 percent, so despite “better-than-expected” results at Turner Broadcasting & HBO (where revenues rose 5 percent and income grew 3 percent thanks to lower costs), the company will probably still be announcing layoffs at its magazines later today.

Revenues at AOL decreased 22 percent and income fell by half, so Bewkes is probably pretty happy that he’s about to get the online company off Time Warner’s books. And Tim Armstrong, meanwhile, has a big job on his hands…

AOL’s Secret Project: Turn The Company Into A Low-Cost Content Machine

AOL, which has been making headlines hiring big-name journalists (the company now employs something like 3,000 full-time writers) is now going in perhaps the opposite direction, content-wise: the company is working on a new content management system (CMS) that will make it easier for AOL to scale up the number of contributors it uses, monetize its content, and pay all the newbies a lot less, TechCrunch theorizes.

“Built into the system is a way to include content from freelance writers and pay them based on the views and ads shown on the pages they write. It’s like a fancy blogging platform with all sorts of tracking and ad-monetization built in….In addition to the content coming in from thousands, or even tens of thousands, of lowly-paid contributors, the CMS system might also be able to automatically generate related content on the fly.”

Now, to be fair, the only thing AOL CEO Tim Armstrong said at the Web 2.0 conference was “Our content is 80% our own, we’re going to keep going. It’s all about taking content management serious,” but the platform the company’s building certainly sounds a lot like Associated Content and its ilk. And to bring in tens of thousands of contributors is all but certain to result in lower rates (or pay per ad impression) unless Armstrong wants to bankrupt his company.

Cheap content is the new Internet.

Time Warner Posts Smaller Profit

Time Warner Inc. posted a profit of $519 million for the past quarter, down from $792 million in the same period last year.

The company’s broadcast division (Turner Broadcasting & HBO) did fairly well, but gains there were not enough to offset losses in Publishing, AOL, and the Filmed Entertainment divisions. Advertising has been weak all around (which you already know), and that hurts the company.

The AOL spinoff should be completed before the end of the year, at which point it’ll stop dragging the larger company down, and also at which point CEO Tim Armstrong will probably announce another round of layoffs.