Earlier this week, AOL gave 20% of its workforce the pink slip. And now the New York Times reports that the next AOL casualty will be the AOL brand itself.
(Don’t let the article headline, “Falco Prepares Another Layoff: the AOL Brand,” mislead you: this has nothing to do with everyone’s favorite singer of “Rock Me Amadeus” and “Der Kommissar.”)
AOL CEO Randy Falco says that their new business strategy will be a noted departure from the brand’s long-standing strengths:
“Publishing is no longer just about the portal,” Mr. Falco explained in a conversation earlier this month. “We are going to be in as many different places as possible.” . . .
Instead, they envision a network of loosely confederated Web sites, services, blogs and widgets that operate under a variety of names. . . .
This isn’t new: AOL has long operated properties with various names, like MapQuest, Engadget and TMZ. But it is accelerating. For example, it introduced a new photo sharing service as Bluestring.com, not a feature of AOL Photos.
Hm . . . is that a bit like a certain other site we know with brands like YouTube, Blogger, Orkut and Picasa (and dozens of other tangentially-related, branded services?). Falco said as much:
He said that he hopes AOL will resemble Google: it combines its own site with a network that represents millions of other sites. The reach of the network attracts advertisers, but most of the profits come when those ads are run on its own site.
But will it work? A network of “loosely confederated websites” can work for some properties—we can all name at least a couple blog networks—but when you have such a long history as a portal, why completely abandon that idea? After all, as the Times points out, Yahoo realizes that its portal is its greatest attraction, and their latest plan is centered around that. MSN has long realized that its portal was the best way to draw in Live Search users.
Falco states that “owned and operated” sites, their best source of revenue, will still compose a portion of their business, but won’t “be our only growth engine”—and that Platform A (née Advertising.com) will play a key role in the company’s future.