3 Comments

Summary:

AOL (NYSE: TWX) is tweaking its website strategy yet again. As the company struggles with the slowdown in display ad activity, it is giving…

AOL (NYSE: TWX) is tweaking its website strategy yet again. As the company struggles with the slowdown in display ad activity, it is giving its web publishing unit a formal name, called MediaGlow. AOL’s Bill Wilson will go from EVP of programming to president of the the new unit, which will oversee programming’s 75 sites, NYT reports. AOL plans to create 30 more sites this year. The formation of MediaGlow is meant to move AOL away from being a portal, as opposed to a publisher with niche sites, like “edgy” younger men’s site Asylum and its female counterpart Lemondrop.com, something it’s been working towards for over a year.

AOL hopes that by creating sites that downplay — or even ignore, in most cases — the AOL brand, it can create more competitive sites that are attractive to advertisers and web users. At the same time, it can sell vertical sites in gaming, or men’s and women’s entertainment, to advertisers as a single package. So even though the main AOL page still exists as a starting point for some users, as Wilson tells the NYT,

  1. I love this…Wilson, Grant and Falco taking credit for Miller and Bankoff's programing strategy. I think if you look at the origin on niche programming, it started under Miller and Bankoff with TMZ, Personal Finance, Kids, WebBlogs, the HBO comedy thing that didn't work.

    The real achievement here, is that they are touting in their press release growth in pageviews and visitors…however, their revenue is down 18%! When Miller and Bankoff did this, they grew advertising revenue by 46%, even taking into account the economy…a 64% swing in two years to the negative is terrible!

  2. Eric: In 2006, AOL lost 20 Billion Page Views from the prior year. In 2007, the Page View loses were stabilized and in 2008 the Page Views grew double digits driven by the 20 new brands. Also worth noting the content costs were much higher in 2005 & 2006 and thus although advertising revenue has been suffering the operating margins in 2008 was much stronger then in the past years.

  3. It is painfully clear to everyone at AOL and in the industry that the pageview growth at AOL has come at the expense of a good user experience. Nearly all of the increases in the last two years have been driven by an insane number of new photo galleries. These galleries are like candy – taste good but they're empty calories. What Wilson and Grant(they crafted this optics play together) have done is essentially dilute the inventory and blame Platform A and Clarizio for the cpm decline and overall revenue falloff. Wilson has said "I did my job- PVs are up, UVs are steady. now you just need to sell"). Fact is he actually accelerated the revenue decline just by flooding the market with impressions to make himself look good. The lower AOL cpms got, the harder it became to sell em since they became viewed as less premium and less in demand- as more and more empty calories were created cpms fell further. You get the picture. Grant was in WAY over his head. Wilson is all about Wilson and way more sizzle than steak.

Comments have been disabled for this post