Tag Archives: Aol

Verizon to purchase Yahoo!

Here are the details at the Globe and Mail.

As a Canadian, I don’t have any experience with Verizon but they have done a decent job in stabilizing Aol and hopefully the same thing will be done with Yahoo!  Maybe they can figure out what to do with their content properties like Yahoo! Sports.

I don’t understand Yahoo! Sports.  They have an amazing roster of writers like Dan Wetzel, Pat Forde, Adrian Wojnarowski as well as some of the best bloggers in the business.  I love their writing and coverage.  It rivals the best in the business but for whatever reason, Yahoo! hides in the middle of all of this other crap that bring in from content farms or even the Yahoo! Contributor Network (where anyone could write garbage and it would appear on the site).  That was the problem with the site, there was all of this garbage and you actually had to work to find the good stuff.

When the site was excellent, it was their contributors providing opinion, bloggers covering news, and the AP and wire services doing game summaries.  You could go and easily find the teams you wanted to read about and the writers you wanted to follow.   It was a combination that made them one of the best sites on the web.  Now go look at it.  All of it is sponsored or third party content disguised as click bait.

Hopefully Verizon will stop this and even it takes a short term loss, figure out how to make some of their signature sites great again.  Some of the properties have gone from the best of the web to the worst.  If Yahoo! ever becomes anything ever again, great and easy to find content will be a big part of it.

Here is how AOL makes money

It’s bad news for content providers because AOL makes no money from them at all.  Instead they make all of their money from old AOL dial-up subscribers who haven’t looked at their credit card statement in a very long time.

AOL beat Wall Street’s Q2 revenue and profit numbers. And, like the last few quarters, the company says that its content business — sites like Huffington Post and TechCrunch — was profitable, if you’re willing to accept a fuzzy definition of profit.

But as always, the most amazing thing about AOL’s business is the thing that drives AOL’s business: Millions of people, who started paying the company a monthly fee for Internet access more than a decade ago, who continue to pay the company a monthly fee for Internet access, even though they likely aren’t getting Internet access from AOL anymore.

AOL doesn’t break out precise earnings numbers for this business, but it gives you enough hints to understand that it’s enormously profitable. As it should be!

Tim Armstrong’s company says its subscription business generated $143 million in “Adjusted OIBDA” – its proxy for operating income — last quarter. That’s more than the $121 million in Adjusted OIBDA that the entire company generated.

Here’s how it makes that money: Getting a shrinking number of subscribers — 2.34 million this quarter, down from 3.62 million at the beginning of 2011 — to pay an increasing amount — the average AOL subscriber now pays $20.86 per month, up from around $18 a few years ago. 

SEO: The future of journalism?

Aol’s CEO on the future of journalism

That’s borne out by a memo from AOL Chief Executive Officer Tim Armstrong on where his company’s journalism is going. It’s fairly chilling reading, ordering the company’s editors to evaluate all future stories on the basis of "traffic potential, revenue potential, edit quality and turnaround time." All stories, it stressed, are to be evaluated according to their "profitability consideration." All AOL’s journalistic employees will be required to produce "five to 10 stories per day."

Note all the things that come before the quality of the work or its contribution to the public interest and you’ve arrived at an essential difference between journalism and content. It may start with exploiting reporters and editors, but it inevitably ends up exploiting its audience.