Life-long Restructuring: Internet giant AOL changes strategy again

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    At the very end of the 90s of the last century, some companies identified the main trends and directions of development of information technologies. Then there were several influential players in the market, and some of them still work (and quite successfully).

    But the spheres of influence have changed a lot. Companies that had a huge impact before have now lost it. They were replaced by young and flexible companies that easily fit into modern conditions and so far comply with continuously changing market requirements.

    Source: loosebolts

    The specifics of the realities of online business is such that many companies lose the market and cannot find it again. AOL media holding managed to avoid this fate several times. Will it be able to do it now?

    Background


    AOL Inc. - An Internet company that owns a wide network of online publications, manages a serious advertising network in this market and offers specialized online services for publishers, consumers and advertisers. The company was founded back in 1985; but already in 2001 she merged with Time Warner Inc. and separated from it in 2009, becoming an independent company.

    Under the leadership of the new CEO, Tim Armstrong, AOL company since 2010 has taken its course to the premium advertising segment and the development of services designed to promote brands. For several years, AOL was rebuilt: non-core and unprofitable assets were sold, and at the same time, new assets were purchased.

    As a result of this approach, the company was able to:

    • form a large portfolio of online brands - well-developed sites with high-quality content;
    • create a new high-performance IT platform for the rapid placement of advertising and its management;
    • gain a foothold in the field of premium content segment, and dramatically strengthen its position in the video and mobile markets.

    AOL formed a business consisting of three divisions:

    • Brand Group (33% in revenue).
    • Membership Group (in revenue 36%).
    • AOL Networks (31% of revenue).

    Brand Group includes publications and mapping services.

    Membership Group includes a set of services and sites that are provided on a paid and free basis by subscription:

    • PC maintenance and technical support;
    • Internet access services Netscape and CompuServe;
    • antivirus software and data protection;
    • AIM mobile app chat for AOL Mail.

    AOL Networks includes:

    • Advertising.com - the largest UK and US display advertising network;
    • platforms for advertising placements: Be On, ADTECH, Marketplace, Adap.tv, Pictela;
    • AOL On video ad network.

    However, the conditions are changing again and the market (along with competitors coming from other niches) poses a new challenge for the holding.

    New deals and new strategy


    In May, Megamind wrote that Verizon acquired the AOL media holding for $ 4.4 billion. She bought back AOL shares at $ 50 apiece. This is 23% higher than the weighted average AOL stock price for the previous three months. Verizon also acquired TechСrunch , Engadget, and The Huffington Post .

    The deal contributes to the development of such areas of the company as broadcasting video via LTE and the Internet of things. In addition, Verizon will have at its disposal an advertising platform AOL. Her valuation is $ 600 million. According to Verizon CEO Lowell McAdam, the immediate goal is to bring together users, content producers and advertisers on a global cross-screen network platform.

    AOL CEO Tim Armstrong continued to run the company after the merger, according to a Verizon press release. Armstrong noted that the holding should become one of the leaders in the segment of the market for mobile device users. This will allow AOL to take a new step in its development.

    Now we can state that a “new step" has been taken. What exact step Armstrong had in mind before is not known for certain. But most importantly, this led to another restructuring.

    On January 19, AOL entered into an extended partnership agreement with Taboola, developer of software solutions for content marketing. Under an agreement with Taboola, AOL intends to acquire a minority share of its shares. AOL and Taboola have been collaborating since 2013. However, right now, when AOL began to implement the strategy of “unity”, the very hour X came.

    Earlier, AOL marketing director Ally Kline pointed to the disconnectedness and weak interaction of the brands that make up the AOL holding. Taboola will help realize AOL’s plans for organizing the exchange of advertising content between the main media holding resources - AOL.com, The Huffington Post, TechCrunch, Engadget, AutoBlog, AOL Mail and MapQuest.

    Restructuring


    After a series of acquisitions and an expansion of the affiliate network, AOL management suddenly comes up with the idea to collect all services for publishers “under one roof”. Yesterday, the company officially announced the creation of the ONE by AOL: Publishers platform. Tim Mulman, president of Vidible , which became part of AOL in 2014, told AdExchanger yesterday that AOL has met publishers who want a “more open relationship” with the holding.

    It is worth noting that working with one platform instead of disparate services will save publishers money.

    Last year, a media holding launched a similar platform (One by AOL), combining AOL's advertising and marketing services.

    The core of the platform is services.Marketplace (includes Adtech and Ad.com), AOL On , Gravity, and Millennial Media , which was bought last year. In addition, the AlephD service purchased at the beginning of 2016 will also be part of the platform .

    AOL also announced its purchase on Monday. AlephD is a French service that allows publishers to evaluate the demand and pricing of their products.

    "New AOL"


    A year ago, Megamind wrote about the similarities between Facebook and AOL. According to The Verge reporters, Facebook is the new AOL. This is a combination of a service provider (user profiles, IM, work with photos) and a portal. Facebook has its own IM, like AOL had in its time. Not so long ago, Facebook bought another IM platform - WhatsApp, just like AOL bought ICQ. Facebook groups are chat rooms at AOL.

    The main business of Facebook is selling ads in the News Feed, which can be compared to the AOL dial-up business. Both businesses are as profitable as they are vulnerable.

    Many publishers are unhappy that Facebook is trying to become almost the main means of distribution (including advertising) of content and wants to dictate its terms. This trend is clearly unprofitable for AOL customers, and ultimately AOL loses the most here, both customers and money.

    But now the media holding has once again been updated and does not intend to concede the title of “new AOL” without a fight.

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