Posted on 08/29/2011 10:10:40 PM PDT by SmithL
Only 6 months after spending a great of its remaining cash on the purchase of Huffington Post, AOL is up for sale according to many insiders in the know. Sources in the industry claim that AOL has met privately with the mega-law firm Watchell, Lipton, Rosen & Katz and investment bank Allen & Company about putting the former ISP up for sale to the highest bidder.
While AOL is generating significant revenue of at least $1 Billion for the first 6 months of 2011, they are still losing a great deal of money and the purchase of HuffPost hasn’t helped their woes.
The HuffPost purchase, which was valued at $315M was widely criticized by both the press and pundits alike as a poor purchase decision, or at least one that didn’t make sense at those numbers. Since then, the merger of the company into AOL has been reported to have numerous management problems.
Despite HuffPost continuing to grow since its purchase, the advertising sales revenue has not been able to sell inventory at the level needed to support the organization. Part of the problem reportedly is that the sales team, lead by search advertising veterans has been unable to convince advertisers that they need to pay a premium cost to be on HuffPost and other AOL properties.
To make things worse, TechCrunch, the mainstay of the online media and technology industry, has shrunk since its purchase by AOL from over 2M monthly visitors to less than 1M (Source: Compete.com) Michael Arrington has publically expressed displeasure with having to work for Huffington, and even gone as far to criticize AOL as “pathetic.”
AOL seems to now be desperate to find either a buyer, or at least a long term solution to solve their issues. It is clear that their management, seen by many as top heavy salary wise, is not suited to run a content company that needs to focus on cost cutting. Where most content companies are run by sleek, cost-effective staff members who get paid mainly on production, AOL still has remnants of the TimeWarner era where people were paid for resumes, not results.
I could not care less if AOL died on the vine tomorrow morning. Still it’s amazing to me that a company that was once so powerful has been brought so low by shortsighted and arrogant mismanagement.
There have to be some geniuses inside that company that have kept it alive this long. AOL has been the joke of the Internet almost as long as there’s been an internet.
Kind of like Daily Kos which came out of nowhere to be some kind of holy website for the MSM.
AOL have a LONNG history of overpaying for companies and sitting on it until it dies e.g netscape and winamp
They are so stupid they don’t even know their advertising people are making fun of them.
Yes, the idiot liberals actually believed their own bullsh*t.
Always a bad business plan.
(DmanA) There have to be some geniuses inside that company that have kept it alive this long.
So.... If I was Microsoft and wanted to ruin the competition, maybe I would 'keep AOL going', even though it was unprofitable.
Just cause the HuffPo business model is to piss off the conservative half of its audience doesn’t mean they shouldn’t be rewarded (in their dreams).
The Ultimate Snub: AOL Buys The Huffington Post and Doesn’t Tell TechCrunch
The size of the buy may be unprecedented in the history of new media, but there’s another interesting story to be told and one that might rock the tech blogosphere: TechCrunch was completely cut off from the deal, to the point that they weren’t even given the story under embargo.
The post announcing the news on TechCrunch hit the site at 9:24pm PST, some 23 minutes after the news was broken by (we think) the tech blogosphere’s best journalist Kara Swisher. But it’s more than that: Kara didn’t just break the story, she posted it complete with a video interview with Arianna Huffington and AOL CEO Tim Armstrong that had been pre-recorded prior to the announcement, indicating clearly that the Wall Street Journal publication had been given the exclusive over TechCrunch.
But it gets better, because not only was TechCrunch not given the information before the embargo, they weren’t afterward either. At the time of writing, TechCrunch quotes the press release of the deal, and appear to have been completely cut off from anyone in AOL, despite TechCrunch being owned by AOL.
AOL is the Atari of our time. Yeah, I know they weren’t necessarily in the same business, but they are both technology companies that were spun off from Warner and Atari died a slow painful death in the decade or so that followed. AOL seems to be doing the same thing. Atari blew it’s final wad on the Jaguar and AOL blew it’s on HuffPo. Quite a few simlarities. Hubris was a big reason for AOL’s downfall, just like Atari.
“Still it’s amazing to me that a company that was once so powerful has been brought so low by shortsighted and arrogant mismanagement.”
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I do not think they had much choice, once the internet became
a public commodity.
I was online when Compuserve and AOL were the ONLY way to be online, prior to the internet and ISPs poping up everywhere.
When they started up, there was not really any internet for them to hook to.
Haven’t been able to trust a single news story since Huff took over. Every article reeks liberal and/or links to huffpost. Heard the editorial board and Arianna don’t coexist so well.
maybe America’s Over Liberalism
Kinda breaks your heart, doesn’t it?
Hard to imagine an outfit like AOL would have just purchased HuffPo for $315M without some out that would give it back to Arianna, who seems the ONLY one who’s ever profited from her rag. The writers for HuffPo obviously weren’t getting paid, and made nothing on its sale. AOL is out big time. And that crazy woman gets even richer. There’s sOmething funny in that. Not sure what exactly.
AOL was one evil company back in the day of dialup. Their trial offers were like roach motels. You could get in but you couldn’t get out.
If you have a billion dollars, it takes a while for all your mistakes to accumulate to a point that you can’t survive anymore. The same principles applies to the state of US as well. It took a century of US to build up to become the richest nation in the world, and will take some time for all the accumulation of mistakes to turn it into a 2nd world country. If you start off rich, you can afford to make a ot of mistakes. It doesn’t mean those who run the the company into decline are geniuses because they could kick the problem down the road for someone else to deal with it
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