AOL Shifts Strategy to Attract More Advertisers, Users
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For years, America Online Inc. grew steadily into the nation&#39;s biggest Internet service by treating subscribers to exclusive content and services it hoped would produce the sort of captive audience that advertisers crave.
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NEW YORK -- Internet company AOL said Monday it is partnering with a unit of Gannett Co. to offer new forms of interactive advertising that incorporate audio and video elements.
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(InfoWorld) - AOL has integrated its various ad networks into a single platform that it hopes will jumpstart its online advertising business, whose weak growth in the second quarter has led to sharp criticism of this Time Warner subsidiary. On Monday, AOL announced that the integrated ad platform, called Platform A, meshes Advertising.com, Tacoda, Third Screen Media, Lightningcast, and AdTech. AOL also announced it will move its headquarters from Dulles, Virginia, to New York City, in order to be physically at the center of the U.S. advertising industry. However, the announcement comes at a time when questions about AOL's strategy and performance are at a high point. In August, when Time Warner issued its second-quarter financial report, some observers were surprised that AOL's online ad revenue grew only 16 percent during the quarter, well below the industry average. In the first quarter, online ad spending in the U.S. was up 26 percent year on year, according to the Interactive Advertising Bureau. Last year, spending grew 35 percent over 2005. AOL in recent years has been transitioning its business model from one based on subscription fees to one based on online advertising. Toward that end, it has made almost all of its content and services freely available on the Web and discarded its "walled garden" approach. Until the second quarter, AOL's online ad growth had either been in line with the industry average or exceeded it, justifying the strategy change. But the quarter's results led some financial analysts to openly question if AOL can successfully pull off its transformation into an online ad-supported business. Time Warner has been investing in AOL's online ad platform. In 2004, AOL acquired Advertising.com, a provider of online marketing services to publishers and advertisers, and last yearÂ it bought Lightningcast, a broadband video advertising specialist. This year,Â AOL snapped up Third Screen MediaÂ to boost its mobile advertising services, and also acquired AdTech for its ad-serving and marketing campaign-management platform. Most recently,Â it bought Tacoda, which specializes in delivering ads based on users' online activities, an area known as "behavioral targeting." With Platform A's unveiling on Monday and the move to Manhattan, AOL executives are convinced that the subsidiary will get its online ad business back on track. AOL is no stranger to corporate shakeups and reorganizations. Almost a year ago today, it announced a significant realignment of its internal business structure, only to see its then-CEO and Chairman Jonathan Miller get his walking papers two months later. Miller's replacement, Randy Falco, unveiled major changes to Miller's plan in mid-December amidst a shakeup that saw several high-ranking executives head out the door. Separately on Monday, AOL also announced an agreement with HP to offer co-branded, localized versions of AOL's portal, toolbar and search engine on HP desktop and notebook PCs sold worldwide. The agreement extends and expands an existing relationship between the companies of a co-branded AOL-HP portal as the default home page in HP consumer PCs sold in the U.S.
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NEW YORK -- AOL is getting a software makeover, its first since deciding to make more of its services available for free in the chase for online advertising dollars.
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U.S. television networks ABC and NBC plan to make their programs more widely available on the Internet, accelerating a strategy to court viewers wherever they spend time.
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(InfoWorld) - Time Warner wants AOL to complete successfully its transition to an ad-supported business and isn't mulling "structural" changes to it, such as selling it or spinning it off, Time Warner Chairman and CEO Richard Parsons said Tuesday. "We're doing better than I had hoped [with AOL], but we still have a long way to go. We have to make sure we stay tightly focused there," Parsons said at a Goldman Sachs conference, responding to questions from a financial analyst. Time Warner's priority for AOL is to make sure the Internet subsidiary executes properly its transformation from a business based on subscriber fees for dial-up Internet access and takes full advantage of the opportunity in the vibrant online ad market, he said. Two key issues are to increase AOL's own ad inventory that it sells directly to clients as well as fortifying the ad platform that allows it to act as a broker and distributor between advertisers and third-party Web sites. "Those are the big executional challenges, given where we're coming from with AOL and the speed at which the industry is moving and the competition," said Parsons, whose appearance was webcast. "That's where the focus is, not on doing something structural with AOL." Parsons said that the dynamics of the online ad market are shifting toward this latter business of ad brokerage and distribution, whose margins are smaller compared with the direct-sales inventory. The reason for this change is that advertisers increasingly see value in the broader reach that ad networks provide as opposed to buying ad space in a specific site like a portal, he said. "It's kind of exciting in one sense, [and] it's a little daunting in another sense because it's all moving so fast, but we think we're in the middle of it, and we think we've got the right tools, management, and technologies to play aggressively," he said. After recently acquiring Advertising.comÂ and several other companies that specialize in behavioral targeting, video ads and mobile ads, AOL has a leading position in this segment of the market, he said. "I think we have the lead in that space right now, so it's ours to lose," he said. In fact, AOL can and should be a growth driver for Time Warner as long as it can increase its revenue at or above the growth clip forecast for the online ad market, Parsons said. That didn't happen in the second quarter, when AOL's online ad revenue grew 16 percent, leading some financial analysts to question AOL's ability to capitalize on the online ad opportunity. Currently, the U.S. online ad market has been growing its spending between 25 percent and 35 percent, according to reports from the Interactive Advertising Bureau. Still, Parsons is optimistic about his Internet subsidiary, which this week announced thatÂ it plans to move its headquarters to New York City and that it has integrated its various ad networks into a single platform. This platform, called Platform A, meshes Advertising.com, behavioral targeting specialistÂ Tacoda, mobile ad unitÂ Third Screen Media, video ad specialistÂ Lightningcast, and ad serving unit AdTech. "Everything we're doing in AOL is around trying to create a platform that has broad reach, increase the amount of our own inventory, and then have [the tools] to optimize [the ads]," Parsons said.
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AOL, the world's largest internet services provider, is to split into four separate divisions to cut red tape and boost profits.
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AOL will reorganize its business  divisions to simplify its structure as it focuses on boosting  Internet advertising sales globally, according to a memorandum  sent to employees on Wednesday.
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Time Warner Inc's AOL said on Tuesday  it has purchased online affiliate marketing network buy.at as  part of a strategy to bolster its Internet advertising  operations.
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AOL said Thursday it expects to drop as many as 5,000 employees, or a quarter of its global work force, within six months as the company restructures its business to draw more online advertising dollars.
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Americaâs largest Internet Service Provider has good news for the web users. They say that AOL subscribers are getting fewer spam mails than in recent times.
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Online ad spending in the U.S. grew 34 percent in 2006, compared with 2005, as marketers continued expanding their use of the Internet to promote their products and services, according to a new study.
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America Online is testing a souped-up, totally redesigned pre-release of its widely visited AOL.com homepage. After lying dormant in the trappings of its classic design scheme, AOL.com has entered the era of high bandwidth. Much like other leading Web portals, users have their pick of news and other content feeds. Lastly, AOL has moved its search engine â powered by Google â front and center along with the most popular AOL.com destinations.
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AOL had its slowest quarter of advertising growth since beginning its ambitious transformation into an ad-focused Internet business, increasing uncertainty about AOL's future especially as Microsoft Corp. boosts its ambitions in the same arena.
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Time Warner Inc. on Tuesday said a  strategy to offer most of online unit AOL's services for free  was making faster-than-expected progress in attracting new  Internet users and cutting costs.
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MUMBAI: &quot;Want a better Internet?&quot; That&#39;s the question America Online is asking in a new brand campaign in the US. The new ad campaign is intended to reposition America Online as the service that is truly on the side of the online consumer.
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(InfoWorld) - AOL needs all the Internet traffic it can get, but it is struggling with the fading popularity of Netscape.com, for many years one of the Web's most popular destinations. AOL doesn't break out how much Netscape.com contributes to its revenue but calls the property a valuable one. "Netscape has a loyal community of users and is an important part of the AOL Network," an AOL spokeswoman said. Soon, AOL will restore Netscape.com to a traditional Web portal format, 15 months afterÂ turning it into a social news site, a change that, instead of boosting the site's popularity, hurt it. Still, one can't blame AOL for the attempt to give Netscape.com a new lease on life as a Web 2.0 site. Traffic to the site had been on a years-long slide. This raises the question: Will switching Netscape.com back into a portal turn the tide? With AOL fighting tooth and nail for every online ad dollar, the performance of the once mighty Netscape.com matters. "If you have a brand that has some cachet or currency and carries recognition, it's logical to use it," said James Goss, a financial analyst with Barrington Research. Still, Netscape.com's past glories will not magically draw people back to it. "It's probably not worthwhile to invest heavily on the site unless they have a coherent strategic plan for it," said industry analyst Greg Sterling of Sterling Market Intelligence. AOL has bet the farm on online advertising as it sheds its old subscription-fee business model. It's a years-long process that continues full-speed ahead withÂ this week's announcement of AOL's plan to move its headquarters to Manhattan and the integration of its ad networks into a single platform. But with its online ad revenue growth a disappointing 16 percent in the second quarter, AOL could sure use the traffic that Netscape.com used to draw even several years ago. An examination of Netscape.com's traffic patterns since AOL acquired Netscape Communications in March 1999 for $4.2 billion tells a story of consistent decline. As critics have pointed out over the years, this is true not only for the Netscape.com portal but also for the company's other products, in particular its browser. "AOL has never known what to do with Netscape. They squandered that asset," Sterling said. "Eventually, the bottom dropped out." In November 1999, Netscape.com had 20.8 million unique visitors in the U.S., reaching close to a third of the country's Internet users, according to comScore. By December 2003, Netscape.com's unique visitors had dropped to 18.8 million, and its reach had plummeted to 12.4 percent of the U.S.'s Internet users, according to comScore. Things kept deteriorating, and by January 2005, Netscape.com had little over 17.5 million unique visitors and a reach of 11 percent. In the next nine months, Netscape.com suffered a massive drop in unique visitors. In October 2005, the portal had 12.9 million unique visitors, and its reach among all Internet users in the U.S. -- 169 million at that point -- had fallen to 8 percent. This page-view graph, based on data compiled by Alexa Internet, shows the erosion in Netscape.com's traffic between early 2002 and today. "It's an interesting illustration of the waning of a very strong Internet brand," Sterling said. As tragic as 2005's traffic numbers look compared with what Netscape.com had been, they would probably elicit tears of joy from AOL officials today. In August 2007, Netscape.com drew 6.1 million unique visitors, down from 10 million in August 2006, according to comScore. The AOL spokeswoman said part of the traffic erosion of the past year is due to the fact that starting in the third quarter of 2006, Netscape Mail was migrated to AIM Mail so Netscape.com lost those visits. Also, in October 2006, the site lost the traffic from the Netscape Connect dial-up access service, which was broken out into its own property. She couldn't quantify how many unique visits the loss of those two components cost Netscape.com, but it's probably fair to say that AOL had much higher expectations for the site's traffic after its social news transformation. Netscape.com drew 61 percent fewer visits in August of this year than in August of last year, a period when visits to social news rival Digg.com increased 142 percent, according to Hitwise Pty. Ltd. In other words, the problem hasn't been the social news format, which lets readers submit and share links to stories as well as vote on, comment on, and rank those articles. Netscape.com simply didn't gain the expected traction with people who frequent these sites. AOL acknowledged this when it announced the plan to turn Netscape.com into a portal again. AOL isn't giving up on the social news site now housed at Netscape.com. Last week, AOL announced that the social news site will be rebaptized Propeller and moved to Propeller.com. However, Propeller could face an uphill branding battle, considering the history of its Web address. According to cached pages found at the Internet Archive, Propeller.com belonged to PropHead Development, which specialized in digital set-top boxes. PropHead was acquired by AOL Time Warner -- now known as Time Warner Inc., parent company of AOL -- in 2000. Archive.org's last cached snapshot for the Propeller.com address dates from January 2002. At press time, Propeller.com is empty of content. As a portal, Netscape.com will feature news articles handpicked by its editors instead of visitors, along with a search engine and links to AOL and Netscape services and content. Netscape.com's forthcoming format is at an alternate address. Basically, it looks a lot like it did before its social news transformation. One change: AOL plans to establish links between Netscape.com and Propeller.com. It remains to be seen if the latest plan to revitalize the once mighty Netscape.com will propel it to new heights or see it sputter into oblivion. What's clear is that AOL once had a portal jewel in its hands. "AOL really wasted an opportunity when they bought Netscape. They didn't do enough to leverage the site's traffic and brand. They basically sat on it. It was a strategic blunder," Sterling said.