To Revive Its Fortunes, AOL Will Acquire or Partner With Startups

bradgarlinghouseBrad Garlinghouse, formerly a senior vice president at Yahoo, is joining AOL as its president of Internet and Mobile Communications, which includes AOL’s e-mail and instant messaging. He will be heading up AOL’s Silicon Valley operations in Mountain View and will be responsible for AOL Ventures in California.

Garlinghouse pointed out that with the growing popularity of services such as Twitter and Facebook, the entire communications arena is ripe for disruption. AOL has an opportunity to capitalize on that disruption. The company is going to either partner with or acquire startups in order to make over its communications business and capitalize on this disruption, he said.

Garlinghouse used to run Yahoo’s communications-related business, which also includes IM and email. AOL Mail has been steadily losing market share and recently slipped behind Google’s Gmail service to the No. 4 spot. AOL’s monthly visitors fell to 36.4 million in July 2009 from 45.1 million in July 2008, or 19 percent, according to ComScore.

Garlinghouse told me that while he doesn’t have a playbook for fixing AOL, he believes interoperability is key. When I asked him if AOL IM could work with Skype, he said, “Making AIM interoperable with Facebook and Skype would be interesting.” Upon leaving Yahoo in June 2008, he joined Silver Lake Partners, a Menlo Park, Calif.-based private equity firm that led a consortium that recently made a $2 billion offer for Skype, a division of eBay.

Garlinghouse achieved a degree of notoriety for penning the often-discussed “Peanut Butter Manifesto,” an internal memo that outlined what ails (and continues to plague) Yahoo. It ended up in the hands of The Wall Street Journal. Before joining Yahoo, where he spent six years, Garlinghouse ran Dialpad, a startup that was looking to capitalize on opportunities in Internet Telephony. He left Dialpad to join Yahoo, which then later acquired Dialpad. Garlinghouse told us that he has no opinion about introducing VoIP-based services to AOL. A couple of Dialpad executives went onto start GrandCentral, which Google bought and is now the underpinning of Google Voice.

Photo courtesy of Dan Farber via Flickr

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