Is AOL Finally Crashing and Burning?

An anonymous reader writes "AOL's disastrous quarterly report showed cash from continuing operations was down 44% from a year ago (adjusted operating income was down 37%), as it continues a rocky transition from monthly subscription fees to advertising. (Their quarterly report also notes 'the cessation of large-scale access subscriber acquisition campaigns' — investor-speak for the fact that AOL will finally stop mass mailings of free trial accounts.) Unfortunately, AOL's advertising business 'did even worse. Its revenues declined by $110 million... every single segment is down.' AOL has already lost 86% of the 30 million subscribers it reported in 2001 — down to just 4.3 million — but advertising hasn't yet filled the gap (possibly because many AOL ads had been displayed to the users AOL no longer has). But at least, as one technology blogger notes, AOL has finally released a mobile application, 'in the new definition of "late to the party."'"

Comments

Re:What would you do?

[Tassach]

Cash in on the Web 2.0 fad. Hire a hundred bloggers to blog all day long. Turn AOL.com into a huge social network, rivaling Facebook

They tried this, multiple times. And failed, multiple times. I know, I was deeply involved with the effort. First came AIMPages.com. Millions of dollars spent, negligible uptake. Then they tried building another social network based off of the old Member Directory. That never even made it out the door. Then they bought Bebo for about 5x what it was worth and only succeeded in driving away those customers it already had.

There are a lot of really smart people at AOL down in the trenches -- some of the most knowledgeable DBAs, SAs, and developers I've worked with in 20 years I met at AOL. Most of the smart ones fled or got laid off but I still know a few of the good ones who are still there, and they are the only reason anything at AOL works at all.

Executive leadership is lacking, to say the least, and they cripple every product by trying to emulate every feature a competitor has without understanding that "actually working" and "not being slow as crap" are essential features for any product. If AOL was building houses, you'd have 3 dozen managers obsessing over having marble counters, oak cabinets, and Italian tile floors, and ignoring the workers who were telling them that the roof leaked, the plumbing backed up, and the foundation was cracked.

Netscape? They pretty well killed that brand off years ago. They bought Netscape for the traffic going to the portal site, which is why they created the Mozilla foundation and dropped the browser code like a hot potato. And the traffic that they paid so much to get? 90% of it was gone within a year of the takeover. They made a half-assed attempt to resurrect it as a Digg-style social networking site, but that took off like a lead balloon.