Armstrong: The Old M&A Strategy Didn’t Make Sense; AOL Spent $9 Billion

Armstrong At Paley Center

AOL (NYSE: AOL) spent an astounding $9 billion in the last decade on an M&A strategy that didn’t make much sense, said CEO Tim Armstrong in a conversation with Bloomberg TV anchor Betty Liu at the Paley Center’s International Council conference. Armstrong reiterated a point he’s made a lot lately, mainly that it would continue to make acquisitions, but it has to adhere to a limited strategy that involves building content and advertising scale. In turn, Liu persistently grilled Armstrong about rumors surrounding possible merger talks with Yahoo (NSDQ: YHOO). But the AOL exec wouldn’t budge.

“I’m not going to comment on Yahoo,” Armstrong repeated. He did say, though, that Yahoo is a partner in some areas and that the two companies talk regularly. “If we can find a way to expand the reach of our content and our advertising, we’ll look at it. But the stuff in the press about Yahoo, there is nothing active now.”

Liu: “But were those reports accurate?”

Armstrong, laughing, responded: “It depends what you’re reading.”

Armstrong also provided an update on Patch’s hyperlocal efforts. The company is investing about $30 million in local this year, as it seeks to have 500 Patch-served towns by the end of 2010. Armstrong took aim at the notion that Patch’s journalist’s weren’t profession, saying, “the average Patch reporter has 6- to 8 years experience and the editors have more than 10 years.”

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