AOL Morphing into a Digital Publishing Company
November 17, 2010
Some publishing companies are trying to morph into mini-motion picture or video game companies. But AOL is an online company, and it is going a different direction.
The headlines about AOL’s financial performance are sobering: Heavy declines in search and display advertising caused AOL’s quarterly revenue to fall 26 percent.
“I would hope AOL is growing at industry advertising rates at the second half of 2011,” Tim Armstrong, AOL’ s Chief Executive(www.aol.com), said in “AOL Revenue Drops 26 percent on Slumping Ad Sales.”
Armstrong has been trying to turn AOL into a media and entertainment powerhouse instead of its typical and most known image as a dial-up Internet access business.
Will AOL find a pot of gold with its rich media and reinvention of traditional content?
The steep decline in revenue suggests that the company needs to find more advertisers who are willing to spend big bucks with AOL. Advertising revenue fell 27 percent from declines in search, display and third-party ads, totaling $292.8 million.
In addition, revenue fell to $563.5 million in comparison to the $557 million expected by analysts.
A warning from AOL to Yahoo: sell, sell, sell, or risk ending up as an online has-been. We predict a 50/50 chance that Yahoo’s next challenge will be similar to AOL’s advertising dilemma. AOL needs to find a path to the end of the rainbow. The company needs a pot of gold to cope with the presence of Facebook, Apple, and a couple of other “with it” companies.
Leah Moody November 17, 2010
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Peace and Starshine