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  • AOL shopping itself to Yahoo, Microsoft

    Posted Jul 16 2008, 10:06 AM by Kim Peterson
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    The back-and-forth competitive drama between Microsoft and Yahoo has opened a perfect opportunity for Time Warner to once again shop its AOL unit. Time Warner is reportedly looking at either merging AOL with Yahoo (with Time Warner getting a minority stake) or selling it outright to Microsoft. Time Warner shares have risen more than 2% today to $14.26 on the news, with Yahoo shares up nearly 4% to $22.38 and Microsoft shares up nearly 3% to $26.90.

    Time Warner has wanted to offload AOL for a while, but now Microsoft and Yahoo are scrambling for Plan B's in the aftermath of failed buyout talks. AOL has a growing ad network and an aggressive new strategy, and could be a decent acquisition for either company. The question is, where should it end up?   Read More...

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  • Time Warner separating AOL's dialup business

    Posted Feb 06 2008, 12:12 PM by Kim Peterson
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    Time Warner is separating AOL's Internet dialup business from the rest of the division -- and it's about time. AOL has been trying to reinvent itself as a serious advertising company, and it couldn't do that with the dialup albatross around its neck.

    The growth of high-speed Internet access has made the dialup business a loser for years now. AOL had 9.3 million U.S. dialup subscribers at the end of 2007, a 29% decrease from a year earlier. There are an estimated 60 million high-speed Internet subscribers in the country.

    Still, that doesn't make AOL's industry position any better. There is no way the division can compete with two giants, Google and Microsoft-Yahoo (if that merger goes through), in the online advertising game. Sloughing off the dialup business "will significantly increase AOL's strategic options," CEO Jeff Bewkes said today in a conference call. Ding! The "for sale" sign has been hung.   Read More...

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  • Cutting 2,000 jobs at AOL is a good start

    Posted Oct 15 2007, 11:23 AM by Kim Peterson
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    It's been a long time since AOL was considered a serious competitor to Microsoft or Yahoo. The company has never been a threat to Google. I would say today's announcement of 2,000 staff cuts marks the end of an era, but I think that already happened. 

    Paring 2,000 from a workforce of 10,000 is significant, but it isn't enough. According to a staff memo by CEO Randy Falco, the layoffs will help the company continue its massive push into online advertising. AOL changed its strategy in August 2006 to focus on advertising and move away from the subscription Internet access business. The company has been slashing jobs since 2001, when it had 18,000 employees.

    Certainly the cuts were necessary. In August, Time Warner pulled back its ad growth forecasts for the year. Its Q2 ad sales grew by only 16%, down from 40% for four previous quarters. And on the Internet access side, AOL lost 1.1 million paying subscribers. A lot of lines are trending down at AOL, and a massive layoff will help reverse that   Read More...

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