I remember the day of the AOL/Time Warner deal was announced–it seemed like the final proof that online would dominate media and how we deal with sorta, well everything. In 1999 eBay had bought Butterfields ($260mm) which was an old school auction house showing how online could snap-up and transform anything it fancied.
London Eye-Pods. The wheel goes round and round on the web also as AOL makes latest flight to the web future as "Aol." . Will it be retro-chic to have an @aol.com email? Yikes.
“Bricks” and “Bricks and Clicks” just were at the mercy of the “pure play” internet machines, creating epic enterprise value and trading easy money and easier stock for established (perhaps troubled) businesses. Well of course, we know how that all played out now. I must have missed somewhere that eBay unloaded Butterfields to Bonhams for a lot less than $260mm. CMGI went down the drain in a huge sucking sound. Now we have the final coup de grace on AOL/TimeWarner. Yes, Ted Turner was right all along–it takes a lot of skill, experience and brainpower to run a big global enterprise. Internet companies mainly don’t have a clue on this and shouldn’t be allowed to mess around with live ammo–unless they are Google (or maybe Amazon).
Decoding Aol.’s Vision of the Future
So, what about all of this? Well, think about the future. Here’s what the ex-Googler now boss at AOL says about their path to redemption:
“Our new identity is uniquely dynamic. Our business is focused on creating world-class experiences for consumers and AOL is centered on creative and talented people – employees, partners, and advertisers. We have a clear strategy that we are passionate about and we plan on standing behind the AOL brand as we take the company into the next decade,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL.
You need to take a look at the new AOL logo to understand some of this corporate spew. The brand is “Aol.” and has a slew of rotating images–that immediately reminds of the ill-fated BA tailfin ethnic art designs boondogle championed by Sir Rod Eddington. When a brand is lost in the woods, they can reach out to people that don’t know them–or at least pay some very expensive branding firm to justifying their “clear strategy.”
Is there any hope the “Aol.” will be cool? Can you exist online without a cool/techie brand? AOL was never cool and always seemed to appeal to the web-newbie-scaredy-cats hiding in their walled garden. Does anyone actually use a @aol.com email address? Seems a symbol of cluelessness online? Hey, maybe it will become retro-chic to have an @aol..com email? Nah.
Yet, even in AOL’s morass–they have some revenues, some customers and a new management team. Looks like they will try to shed some business units (ICQ, Bebo on the block and MapQuest likely) and get focused and more cash to work with. So where do they see some hope? Looks like next generation “user experiences” online.
Again according to AOL boss:
“the next wave of the Internet will really be about content.”
Which PCWorld reports in response:
“I don’t agree with that,” Sterling said. “Content is very important and Aol has some good sites, but there’s a lot of content that’s commoditized, especially around news. It’s a more nuanced issue, more complex.”
Still, Aol is jumping feet-first into original content creation. The company now has 3,500 full-time and freelance “content creators,” like writers, photographers, videographers and journalists, and 80 percent of content on Aol sites is original.
I suppose it is a good sign that the analyst disagree–wtf do they really know. It is of course ironic that Aol. alone is trying to do what it was unable to achieve as part of TimeWarner. But if Aol. can become cool enough, well maybe they can create interesting content for the new online post-convergent metaverse? But, I generally think that big companies don’t really innovate or at least are never disruptive enough to do something amazing–so if Aol. is going to do something, perhaps they are right to get a lot smaller and a lot more aggressive.
Why is cool important btw? Cool companies are either profitable and can do what they want, how they want or are so cool that people love them faster (=low cost for marketing) or love to work for them (=work at lower costs points). So if Aol. is neither cool nor profitable–well they are not gonna make it too far.
No Guts, No Glory (No Chance for Aol.?)
Will Aol. have the guts to dramatically cut and run from old world business (like anything that worked more than 3 years ago)– like portals and selling banner ads in a fierce and visionary manner like the Intel/Andy Grove’s boldest ever DRAM move in 1984? No guts, no glory?
I think on of Aol.’s biggest challenge is getting back to some level of trust/respect with users. Content is not in fact a commodity–or perhaps quality content isn’t. And this is more than about news content–which Aol. never did anything too useful about anyway. And is it even imaginable the Aol. would try to compete with CNN now? Could they even take a shot at Current Tv? So what kind of content will the smart new management team at Aol. start to develop? = community content and engaging online experiences. And can they make this content at the right costs? Web content needs to be lower cost than broadcast by a long way.
I would assume the Aol. has already done a good enough customer segmentation to understand where they have some profitable ISP support. Now they should be looking at how to build communities around these dedicated users. Probably it will look like a bunch of retirement online type communities (ok, that’s a random guess because I think only older pe0ple use AOL). But enabling a community is a very different role than being a media powerhouse crushing the competition and cranking out scalable content 24/7/52/100
Assuming Aol. can organize it’s resources it should be able to attack the kind of $5mm deal CNBC and WTTC announced for content co-creation and community. Here why I think brands will look seriously at content co-creation deals and dump banners as they reallocate their 2010 spends.
And brands do need to advertise heavily in 2010 — ask Google who is spending big time right now here in UK to promote Chrome. Yup, not even Google can make a big enough impact with their own pr machine. Community is a great way to mix the online with the real world.
Net Net on Aol. = Help for Heritage Key! (thanks guys)
Aol. has an incredible challenge to be something exceptional. They have a shot (more than a start-up by far) to do something bold and game-changing. Will they take that shot–my guess is yes. They have an ex-googler who has the taste for online blood and (unless he gets neutered in some corporate nonsense) should only want to deliver big and make is his own name in the hall of internet fame.
We’re excited about what the new, emboldened Aol. means for us–anyway! If they go down the content+community path then they are framing the marketspace for our projects like our Heritage Key–which is already there in some sense and trying to establish itself there. Deals like the $5mm CNBC/WTTC content co-creation packages are the monetization foundations to support this direction. And we will be a offering those deals at much lower price points while delivering equal results in 2010.
