I’ve been interested in the reinvention of Aol in the Tim Armstrong era. So far, we’ve seen big cost cuts and a big bet on content. By cost cutting, Armstrong is stabilizing the foundation by reducing it down to a sustainable size. He must reduce the foundation if he wants to rebuild Aol.
This buys some runway to actually implement a strategy. As time goes on, the excitement and optimism of the potential opportunity will wane. They’ll begin to feel the pressure from the street to grow. What happens then? They’ll have to push even harder to grow page views and monetize them.
It’s the same problem every other online media company is dealing with. If they can’t make something happen, they’ll soon start to resemble IAC (with the benefit of an access business that continues to throw off cash for a long while).
Aol’s New Model: Fighting The Downward Trend.
