valleylist(sm) v139 r.1 monday 12.20.2010
high tech products companies consumers
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NEWS
AOL THE SPECIAL EDITION is a gestalt on the oldest surviving consumer information services company in the world.
america online [founded 1985] was marketing information services to ordinary businesses and consumers way back when darpanet [predicessor to the internet] [founded 1962] was still serving the needs of the defense industry. trying to find a market. prodigy and compuserve were the competition at the time. the internet [converted over from darpanet around 1993 with the creation of the internet society] had yet to be born.
new consumer information services companies were springing up all over the place. and folding a few years later. trying to find a market is very expensive. big companies loose patience and fold after a few years of business development fun.
no dinosaur. america online offered the latest technology and information to anybody and everybody. today aol is a top 10 internet company way up there with yahoo google amazon and facebook. steve case the aol founder and chief has seen every form of competition and exploited every new angle for becoming the dominant force in consumer information services. yet even steve case didn’t see the internet coming. a massive world wide network of networks the internet arrived and now includes almost everything and everybody. the government directive to big business. make internet economics work for you and don’t leave anybody out. aol still struggling for an identity in the age of the internet kept it’s high priced access and information service at $25 a month and launched a free mirror site for the internet.
in 1998 aol bought netscape for around $4 billion and in 2007 discontinued the pioneering netscape browser. a big internet play for a very aggressive company.
aol merged with time warner in 2000. the conglomerate formed by time warner’s gerald levin floundered for many years as an information service in search of it’s roots. aol was unable to find a real identity in the mega corporate environment of a huge cable and publishing conglomerate. it still seems like a hybrid. part dial up information service access provider and part member services. part information services and part technology company. in fact aol’s biggest wins have come from technology innovations like instant messenger [im] [icq] and special member-only services. time warner [$26.68B] already owner of hbo went on to merge with ted turner’s news and entertainment service turner broadcasting [including cnn] and is considered a global leader in communications information and entertainment world wide. latest reports are growth in a areas.
the aol spin off is reporting negative results.
elon musk inventor and founder of tesla motors and civilian space travel company space x is the “valleylist” avatar this week.
aol surprisingly disregards the importance of proprietary content. all those years with warner cable and time-life leaves aol still looking like a news and information access company as opposed to an electronic publishing company.
aol became a real internet success anyway and was spun off from time warner in 2009 at a market value of $300 billion. aol still appears to be poised on the edge of a mega success only to find that the real competition these days is the internet itself. time warner went on to merge with turner broadcasting and remains the largest communications and information company world wide.
“valleylist” challenges aol to try to become as big as the internet. forget web 2.0 and other time wasting companies big as aol is they are still thinking too small. aol management just tried to make a play for yahoo only to find yahoo uninterested. report aol abandons yahoo merger as yahoo cuts headcount. while yahoo is in trouble for all kinds of reasons aol needs to grow through acquisitions. pick up for example the government project to convert over to all digital television and finally get aol on all existing and new media platforms. with a big technology push underway upgrade aol content and positioning to a real 21st century aesthetic. the aol avatar should probably grow up a little bit and become a real character. sounds like aol was in the right place at the right time and made the wrong decisions. end result is a lot of new technology initiatives are left incomplete.
at least aol tv should be more than a guide to television programs. it really should fulfill consumer expectations of aol internet content on television and perhaps go as far as aol television programming.
to add customers and increase advertising revenues aol now operates approximately 80 branded and content sites including moviefone fanhouse parentdish asylum spinner dailyfinance blackvoices politicsdaily engadget walletpop and mapquest to mention a few.
aol iphone apps including im icq radio and aim are the “valleylist” app of the week.
“valleylist” suggests a happy holiday downloading your favorite beatles digital music from the itunes store starting with here comes the sun sun king all across the universe and magical mystery tour.
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aol highlights
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$2.65B revenue [compared to yahoo's $6.5B and google's $27B]
$1.36B gross profit
-30% profit margin
6,700 employees
aol subscribers around 4-6 million [down from 26 million in 2001]
aol claims 250 million individual visitors each month
[comscore media metrix places aol in the internet top 10 with google yahoo and facebook]
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actual financial data from aol corporate
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DISCUSSION OF RESULTS
Revenue – - – - Q3 2010 – - – - Q3 2009 – - – - Change
Advertising revenue
Display – - – - $120.8 – - – - $139.9 – - – - [-14%]
Display – domestic – - – - 112.5 – - – - 121.8 – - – - [-8%]
Display - interntl – - – - 8.3 – - – - 18.1 – - – - [-54%]
Search contextual – - – - 99.2 – - – - 138.4 - – - - [-28%]
AOL Proprty – - – - 220.0 – - – - 278.3 – - – - [-21%]
3rd Prty Network – - – - 72.8 – - – - 124.0 – - – - [-41%]
Revenue – - – - Q3 2010 – - – - Q3 2009 – - – - Change
Advertising revenue
Display – - – - $120.8 – - – - $139.9 – - – - [-14%]
Display – domestic – - – - 112.5 – - – - 121.8 – - – - [-8%]
Display - interntl – - – - 8.3 – - – - 18.1 – - – - [-54%]
Search contextual – - – - 99.2 – - – - 138.4 - – - - [-28%]
AOL Proprty – - – - 220.0 – - – - 278.3 – - – - [-21%]
3rd Prty Network – - – - 72.8 – - – - 124.0 – - – - [-41%]
Total ad revenue – - – - 292.8 – - – - 402.3- – - – [-27%]
Subscrptn revenue – - – - 244.8 – - – - 332.2 – - – - [-26%]
Othr revenue – - – - 25.9 – - – - 29.4 – - – - [-12%]
Subscrptn revenue – - – - 244.8 – - – - 332.2 – - – - [-26%]
Othr revenue – - – - 25.9 – - – - 29.4 – - – - [-12%]
Total revenue – - – - $ 563.5 – - – - $ 763.9 – - – - [-26%]
(In millions)
(In millions)
Advertising revenue declined $109.5 million versus Q3 2009 of which $62.3 million related to AOL-implemented
initiatives and comprises: $46.9 million in lower Third Party Network revenue associated with European
shutdowns.
initiatives and comprises: $46.9 million in lower Third Party Network revenue associated with European
shutdowns.
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source: aol 3rd quarterly report
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additional information
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new content sites and platform a the aol advertising network that builds content providing products and services. aol continues to offer the original service of internet subscription access services for the company’s consumer offerings in the united states. also aol content and services are marketed through computers digital devices consumer electronics broadband access mobile carriers and toolbars widgets portals and web sites social networks and search engine marketing.
key statistics suggest aol needs new growth strategy and continues looking at new aquisitions. a company that’s tried almost everything aol is still making a play for aquiring or merging with a big company. the latest is yahoo itself. “valleylist” like a lot of people liked aol as a big media company only the results of the aol time warner merger were just bizarre and ended up not especially productive. in fact the results were not good.
conclusion. why not a real technology company with a massive world wide network.
almost like a digital video internet. like everybody else start by a new tablet computer designed specifically for aol and go from there with new and innovative technology. competition from social groups should be solved with the aol membership becoming a social group of their own that brings in new members. bebo the aol social group on the internet folded a looser. in the meantime aol members want new services.
in fact it’s been many years since aol surprised everybody with new technology services. shopping and ecommerce went to amazon and ebay. the aol dial up access service and membership remains a big winner. also a big win the internet version of aol generating lots of page views and advertising.
“valleylist” recommends a new strategy.
totally surpass internet technology. set a new high standard for information services digital content and technology across all platforms.
greg mckenna
publisher
valleylist
all rights reserved.
“valleylist” is a free weekly internet newsletter focusing on technology and politics emailed to 5 mllion readers every week. copyright greg mckenna.
