Advertorial AoL. news, love it? lament it? UPDATED
What CEO Tim Armstrong described to PaidContent.org as a “spark of revolution of people doing content at a different scale” sounds more like a rather tired online practice of hiring freelancers for a “pittance and a promise” – and perhaps offering advertisers too much control over the news that gets told on the new AoL. While Armstrong promises that it plans to use algorithms to determine the news that will generate the most potential for advertiser sponsorship, journalists and online publishers should be concerned. Those who have been lamenting the passing of newspapers and the decreased sourcing of newspapers for local, national and international news and information, may well look at this plan as a “see I told you so.”
Rather than relying solely on editors and journalists to decide which stories get told on AoL., the re-branded site will use a series of algorithms to predict stories, photos and videos that appeal most to audiences and advertisers. Included in the algorithm data gathering will be searches made by those still using AoL.’s dial up service to access the Internet. Once AoL. determines the products for which the highest number are searching, its advertising sales team will look for retailer sponsors. These sponsors will play no editorial role, AoL. promises.
Seed.com, launching soon, will be the article-assignment site for the 3,000+ freelancers hired by AoL. These freelancers will be paid according to product/topic popularity, though advertiser rate predictions start at zero. This puts us in mind of sites such as Suite 101, Examiner.com, Demand Media and others that offer little more than hope to their freelance writers.
There’s nothing really new here, and while we applaud efforts to bring in new advertisers, we’re concerned about the news/advertising fine line the new AoL. – just might cross.
Read more AIM Group news about AOL’s transition to AoL. here.
UPDATE: We just learned from ClickZ that Tim Armstrong co-founded Associated Content, a company that pays freelancers very little up front and a subsequent pittance depending on page views generated by the specific article.
UPDATE – AOL gets new branding, new logos
After much study including e-mails from consumers, AOL executives have decided to retain the AOL name but to write it AoL., with a period at the end. They’ve also designed six new logos (so far) which will display on the new corporate site Dec. 9, when it breaks from Time Warner. Silicon Valley Insider’s article shows, with commentary, the six logos just revealed by AOL.
“Our new identity is uniquely dynamic,” said Tim Armstrong, AOL chair and CEO, in the announcement. “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.”
AOL has recently told its employees that it needs 2500 of them to voluntarily resign, as a way to save $300 million. Without volunteers, involuntary layoffs will occur. The details of the layoff plan were recently published on Silicon Valley Insider.
Jason Calcanis, founder of Weblogs, Inc. and Mahalo.com, created an IPO strategy that the new AoL. will follow closely. Calcanis has stated that he plans to buy $250,000 in AoL. stock after it becomes available to the public.
“I believe Tim Armstrong is a great executive who understands the new publishing model, and he is a consumate sales person from what I understand,” Calcanis told Silicon Valley Insider. “ The biggest challenge for AOL is getting direct traffic, which is to say “traffic that you earn,” as opposed to traffic from their homepage. They are well aware of this. The way you get direct traffic is to have a visionary–and at times unreasonable–editorial leader like Nick Denton, Rupert Murdoch, Jann Wenner or Si Newhouse. Right now AOL has great editorial talent, but clearly they don’t have that person.”
UPDATE: Here’s the video of the new AoL. branding
AOL taps author of ‘Peanut Butter Manifesto’ as president of of Internet and mobile communications
Brad Garlinghouse, the former Yahoo executive who penned the legendary “Peanut Butter Manifesto,” has been hired to expand AOL’s e-mail and instant-messaging services as president of AOL’s Internet and mobile communications.
As SVP, Garlinghouse had similar duties at Yahoo when in 2006, he expressed a litany of corporate problems in an internal memo, noting that Yahoo had spread itself too thin, like peanut butter. When his memo — part rant, part cheer — leaked publicly, it became known as the “Peanut Butter Manifesto.” It also served as a catalyst and blueprint for Yahoo’s eventual restructuring.
AOL is certainly in restructuring mode; Time Warner is spinning it out by the end of the year. Most recently, Garlinghouse was senior adviser at Silverlake Partners.
AOL promotes Panier to head Bebo global ops
AOL has promoted the VP and COO of its Bebo social media unit, Stephane Panier to head the group’s global operations. Panier will report to directly to Jon Brod, EVP of AOL Ventures, Bebo’s new home within AOL.
The move suggests that rumors AOL will sell Bebo – which it acquired only last year for $850 million – may not be accurate.
Brod called Panier “the ideal leader to build on Bebo’s existing successes, to chart a course for its future, and to execute against that vision.”
Panier, like new AOL CEO Tim Armstrong, came from Google where he worked for six years in senior finance and operations positions.
Time Warner spinning off AOL
It was a marriage that never really worked, but you have to give them credit for trying as long as they did. Time Warner said it’s spinning off AOL into its own publicly traded company, calling it quits after eight years.
Time Warner owns 95 percent of AOL. A 5 percent stake is held by Google. The company said it would buy out Google’s share in Q3.
“For AOL, becoming a standalone company will give it more focus and strategic flexibility,” Time Warner CEO Jeff Bewkes was quoted at the annual shareholders’ meeting Thursday in New York. He indicated that TW will focus on its movies, magazines and cable TV networks, which include HBO and CNN.
In 2001, AOL bought Time Warner for a staggering $147 billion. It went downhill from there. Over the next two years, AOL Time Warner absorbed nearly $100 billion in debt as the combined company’s value plummeted. Time Warner eventually kicked AOL execs out of the corner offices and removed AOL from its name. Its market value today is about $27 billion.
The “divorce” will separate AOL to be run by former Google Inc. advertising executive Tim Armstrong. Armstrong was hired in March to try to restore the AOL brand, which has been eclipsed by Google, Yahoo and MSN. It still draws millions of views to its content and ad networks and is on track to earn an estimated $1 billion in 2009, mostly in ad revenue. America Online, its dial-up Internet service, has been decimated by cheaper and faster services from phone, cable and mobile services. It peaked in 2002 at about 23 million subscribers. Last quarter, it had about 6 million.
Bloomberg: Miller not buying Yahoo or candidate for CEO
Jonathan Miller is not a candidate for the CEO job at Yahoo and isn’t pushing to buy the company, according to a report from Bloomberg. The former chief of AOL and a partner at the venture capital firm Velocity Interactive Group is said to be scoping out new media investments at a time when spending in that space is dropping.
Miller wouldn’t comment on his reported involvement with Yahoo. But he did say in an interview that he wants to own companies that cater to people who watch television and read the news online.
In July, Miller made headlines when Carl Icahn named him as a potential director for Yahoo when the billionaire investor was seeking to oust the board.
Speculation about Miller’s possible move to Yahoo has certainly helped the beleaguered search engine and portal. Yahoo shares rose after the Wall Street Journal said on Dec. 2 that Miller might pursue a takeover of the company. Ashley Huston, a Journal spokeswoman, said the paper still stands by the story.
Some of the projects Miller has been working on include Next New Networks, an Internet video publisher (the automotive news program Fast Lane Daily is their flagship content – we covered the company in CIR 8.13), as well as FatTail which helps companies manage their advertising inventory.
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