So far AOL’s turnaround effort, especially its acquisition of The Huffington Post, carries the appearance of shuffling the deck chairs.
At best the business model sold to investors is one similar to the dot-bombs: lots of hype coupled with loose talk about advertising revenue based on audience numbers.
This is a pure marketing driven turnaround and it would seem that AOL’s new strategy does not acknowledge three huge issues:
- Too much profit-draining complexity from a mishmash of news and 50+ unrelated information sites
- Too many existing substitutes and competitors
- Low barriers to entry for new competitors
Perhaps AOL’s shareholders won’t blame CEO Tim Armstrong for throwing a Hail Mary. The company’s numbers have been headed south for a decade. But he will likely take a fall for throwing the pass to Arianna Huffington, a micromanaging self-styled celebrity with zero big company or turnaround experience. Ms. Huffington is the new editor in chief of AOL’s 50+ content sites which makes her the #2 executive in the company, behind only Mr. Armstrong. Continue reading