Posted November 6, 2008 9:31 am by with 15 comments

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I have written about AOL in the past. I usually write about them when I am reminded of them. Honestly, AOL plays literally no part in my life except when quarterly results of Time Warner are discussed. In today’s WSJ, AOL once again shows up in the news in dubious fashion. If you are the AOL brass you would sure hope that one day you are not part of this headline “Time Warner Posts Flat Profit; AOL Offsets TV, Media Gains”. It doesn’t seem likely that this will happen in the near future or maybe ever.

Now it appears as if the AOL brand is being used as an excuse for an under performing Time Warner. It’s kind of like going to the family picnic and your brother’s family shows up late again because one of their kids just can’t seem to get it together. Time Warner’s Chief Executive, Jeffrey Bewkes, must have a standard line he gives on analyst calls that reiterates AOL’s inability to make anything but trouble for a media giant that is suffering right now.

Third quarter results for AOL showed a 6% decline in advertising revenue which is the worst results of the year. Display advertising dropped 15% which is not a surprise because it has long been a concern of everyone as to its poor performance as an advertising vehicle. This quote really says it all:

Solving the AOL problem is one of the biggest challenges facing Chief Executive Jeffrey Bewkes as he seeks to kick-start Time Warner’s faltering share price. Since taking the reins 10 months ago, Mr. Bewkes has slashed costs and pulled the trigger on a long-expected spinoff of Time Warner Cable, focusing the company more on its content businesses. But finding a long-term solution to AOL continues to elude him.

If you are tird to AOL you must be getting weather reports that it looks stormy and dangerous in the near future. Time Warner has spun off Time Warner Cable to keep those numbers off the mother ship’s books moving forward. Taking that fact into consideration, you have to feel that AOL is not too far away from a similar fate. In reporting for the third quarter, Time Warner’s CFO John Martin made it a point to show what an adjusted operating profit for Time Warner’s content businesses would be WITHOUT Time Warner Cable and AOL. Ouch. Do you think they are setting the stage for future results where AOL is not a concern?

Now there will be responses to this post from both sides of the ledger. People who work at AOL are passionate about their efforts and that’s good. The facts, though, show that passion only goes so far. You need to make money to be a player. AOL is now only discussed as a drag on profits so this does not bode well for remaining a part of the Time Warner family. Heck, this situation gets another article in today’s WSJ discussing how Time magazine and Fortune could be let loose. The final paragraph of that article should make those at AOL a bit nervous:

Time Warner held on to AOL too long — although Mr. Bewkes, since taking over as CEO, has taken more aggressive steps to unload the online operation. He should now at least test the market for Time and Fortune to see if he can exit at a sensible price.

I guess the idea of a “sensible price” for AOL is out the window. Oh well, you snooze you lose.

  • “It’s kind of like going to the family picnic and your brother’s family shows up late again because one of their kids just can’t seem to get it together.”

    I nearly spewed coffee on my keyboard! LOL

  • Andy,

    Glad I could almost ruin your electronics.

    Frank Reed’s last blog post..In Search Of a New Day and New Business

  • I have some background with Time Warner Cable; they always used to be a massive cash cow for Time Warner.

    Unlike many of the other units, cable customers send in a payment month after month because it’s a subscription. With the more fun, “sexier” units like music, movies, and book publishing, you’re always rolling the dice that the next product will be a hit or a flop.

    HBO was very similar, but obviously much cooler than cable (which is at heart much like a plumbing company, drilling a hole in your house and attaching the pipe).

    AOL on the other hand was a millstone from day one … the merger was just a lousy deal.

  • They should just sell it off and get rid of it. What happened to the Yahoo-aol deal?

    Saad Kamal’s last blog post..Top SEO Mistakes Video

  • AOL, what is it ? 😀

    Busby SEO’s last blog post..By: edtechguide

  • Im sure now that the yahoo google deal didn’t work out, yahoo will try to seek a deal with aol so they both get better

  • AOL? Who is that? Zurpit, that is an innovative suggestion!

    Nicole Price’s last blog post..Ideas for a Mother-to-be

  • Not heard of AOL in a long long time…

  • Google will buy ’em.

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  • Down here in South Africa AOL doesn’t feature much. Cool article nevertheless. Please don’t spew any coffee over your keyboard, Andy!!!

  • It’s been long since I heard of AOL, is it dead? LOL

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  • Also a South African man here, and I agree completely, AOL isn’t a player, in the least, on South African soil… Does this indicate a lack of reach or relevance?

  • cat

    Yahoo is loosing it’s positions too fast so dealing with AOL or not, it won’t help

  • According to Alexa AOL is doing great! Give it another year and it will overtake Google. he he

  • PS3

    AOL was the dial-up provider of choice when first released in the UK but has dropped away since.