AOL on the Wrong Side of the Information Superhighway

September 10, 2011

I moved from the cabbage cuisine capital to beet land today. After some interesting travel, I snagged a net connection and read “AOL and Yahoo Are Not Talking About a Merger (Any More Than I Am a Yahoo CEO Candidate).” Clever stuff. I liked this passage:

AOL stock is down 36 percent since its late 2009 debut and almost 38 percent since the beginning of 2011.

The references to Ms. Bartz’s word choice and the sentence fragment “But no longer and definitely not currently in what approximates any serious effort” were memorable. However, my take on the AOL situation is anchored in the “stock is down” snippet.

AOL is making clear that getting hired at Google is not the type of preparation that makes a great manager. “Affable” is a great quality which I lack. The problem is that AOL is implementing Google style wild and crazy business plays. One of these plays is supposed to produce a touch down. So far the plays have only suppressed value.

Is there a fix? I don’t like to take a strong position in this free blog, but I am tempted to suggest that there are several facts which one may want to consider before investing one’s life savings in AOL.

The company has a potential CEO in waiting. Maybe this person needs a shot at making good on AOL’s content investments? Lose one female CEO, and AOL can fill the gap with another one. Why wait?
The flap over “journalism” strikes me as an example of what I call “silly leadership.” That the situation exists has less to do with journalism than getting one’s act together.
The world is moving on, and companies like AOL and Yahoo are today’s buggy whip manufacturers. Ignoring the Facebook and Google social plays shows that these 1990 outfits can’t cope with today’s world. Will AOL adapt? Good question.

I think that AOL and Yahoo are real time, real life case studies of what happens when Internet grand parents have to figure out how to use an iPad and create a Facebook page.

In terms of search, neither company has paid attention since Google slapped the firms on the ear in 1998. Now time has run out. The question is, “Which post AOL and Yahoo will follow the trajectory of decline that these two once shining stars are taking?”

Stephen E Arnold, September 11, 2011

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.