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AOL Up for Grabs

Despite continuing to acquire other companies, including Goowy and Buy.At marketing network, it looks like AOL is seriously losing steam. Time Warner CEO Jeff Bewkes announced today that the company would be undergoing major restructuring.

Bewkes said that they’ve already begun to split AOL into two divisions, one focused on advertising (presumably still called Platform A, as announced in September). The other, which I think will retain the AOL brand and subscribers, will be spun off and possibly sold.

CNNMoney mentions some of the reasons that Time Warner is shedding the company it acquired eight years ago:

The company saw a 32% plunge in revenue at AOL, as it lost 29% of the subscribers it had a year earlier. Operating income at the unit tumbled 70% due to the sale of its Internet access business in Great Britain and France.

Will Social Networking Ever = Money?

Someone, somewhere is supposed to be raking it in from social media—but we never have figured out who that person is (unless it’s Mark Zuckerberg). We see the CEOs with their millions, and everyone wants in on the wave of the future, either in an IPO or working for the company behind the social network, or establishing their own.

But is there really any money to be had? Last week, social networking darling Facebook, still a privately-held and VC-funded enterprise, allegedly leaked its financial projections for the year. The outlook isn’t exactly what you’re hoping for in a company that is supposedly worth $15B:

2007 Revenues: $150 million

2008 Revenues: $300 to $350 million (projected)

2007 Headcount: 450

2008 Headcount: 1,000 (projected)

AOL Buys Goowy Widget Creator

After Yahoo got a bid from Microsoft, I wonder what will happen with AOL. Will they be next in line to be acquired? Today they were the ones acquiring. AOL has been partnering with widget making company Goowy since early last year. Now they have acquired the company. The purchase price has not been made public.

I keep wanting to say Groovy but I assume the name is really a way of spelling GUI as in “graphical user interface.” Goowy is best-known as the parent company of yourminis, a widget maker and widget search engine.

Goowy facilitated widgets for myAOL. They are based in San Diego and founded in 2004. In 2006 they got funding from blogger, billionaire, and Dallas Mavericks owner Mark Cuban.

For Online Advertising the Biggest Growth is Local

Online advertising will continue to grow for years to come, especially local business advertising. JupiterResearch. According to the US Online Local Advertising Forecast, by JupiterResearch local advertising will grow 13% in 2007 to 2012. Online advertising generally is expected to grow 12 percent during that time. Advertisers will focus on local display and search advertising the most.

Compound annual growth rates (CAGRs) are expected to be 18 percent and 16 percent, respectively, during the next five years.

Online advertising is taking a larger proportion of budgets than in past years, but won’t replace traditional advertising.

“Although traditional media such as newspaper and local broadcast are facing new challenges regarding their business models, local advertising in these media mainstays is not a dying market. The ability to assemble relatively larger general audiences will remain a principal advantage of traditional media.”
- Lead Analyst Barry Parr, Media Analyst for JupiterResearch

Google Print to Add Bar Codes

Google’s hoping to spurn more interest in their newspaper advertising service – Google Print – by adding bar codes to ads. If you have a cell phone that is compatible, you could point it at the bar code and go to a web site printed at the bottom of an ad.

As an example, I’ll take my favorite section of the newspaper – Arts and Entertainment. If you read a review about a performance of Wicked in your area, there may be an ad for the production. If it was a Google Print ad that used bar codes, you could quickly access the right page to buy a ticket at a nearby theater. The barrier at first will be just making sure you have a compatible phone, with Internet access, and the right software installed.

Coming Soon – Target Google AdWords to MySpace Users

This is an exciting development . Google is testing a new feature to allow you to target ads to specific demographics on MySpace and other web sites. So it your web site sells NY Yankee tickets and your main demographic is men aged 30-45. Your ads can show up just on profiles of men who are in that age group.

You can then adjust your bids accordingly. The ads will be filtered by age and gender demographics and you can get reports to further refine your results.

Many people are blind to ads on social networking sites, but assuming you’re great at capturing your audience’s attention, this could be huge. People spend a lot more time on MySpace than a regular web sites. Recent data put the average time people spend on MySpace as a whopping 29:36 minutes. Plus they return to the site more frequently.

Microsoft Still “Several Years” Away from Online Ad Success

If you’re an investor in Microsoft (MSFT) then you’re no doubt rejoicing at the company’s recent quarterly numbers. Not only is profit up 81% from last year, but the company is so confident about the rest of the year that it raised its earnings guidance!

Now, if you were hoping that MSFT’s search and online advertising unit would be a huge chunk of that profit increase, you might want to go back into hibernation–for a few more years!

Microsoft gave credit for its profit increase to its launch of software–mostly Vista–and not much else. In fact, according to MarketWatch, Microsoft lost $245 million from its "online services" unit (although revenue did increase).

OK, but surely MSFT’s search efforts are about to kick-in right? Wrong!