Six months after AOL’s much talked about decision to purchase the Huffington Post for a whopping $315 million, insiders are reporting that AOL itself is now up for sale. AOL’s absorption of Huffington Post incorporated services like MapQuest, TechCrunch and AOL TV into the popular blog and content aggregator.
Despite the acquisition of Arianna Huffington’s empire, AOL is still hemorrhaging money.
According to Technorati, certain services in the HuffPost family, specifically TechCrunch, have experienced huge decreases in web traffic, and increases in management problems since the AOL purchase.
AOL seems to now be desperate to find either a buyer, or at least a long term solution to solve their issues. It is clear that their management, seen by many as top heavy salary wise, is not suited to run a content company that needs to focus on cost cutting. Where most content companies are run by sleek, cost-effective staff members who get paid mainly on production, AOL still has remnants of the TimeWarner era where people were paid for resumes, not results.
When AOL was called on its hiring of mergers and acquisitions law firm Wachtell, Lipton, Rosen & Katz and investment bankers Allen & Co., C.E.O. Tim Armstrong said “There is no deal on the table. No proposed deal.” Evidently, Armstrong didn’t rule out the possibility that AOL was shopping.
Jonathan Berr writes that the problem is not with the economics, but rather AOL’s business model, saying that “the company as it exists now makes no sense. Its disparate services, such as AIM instant messaging, MapQuest and Moviefone, are a vestige of a time when AOL was a ‘walled garden’ that tried to be all things to all people.”
Once a pioneer of innovation on the internet, AOL has since fallen down into a rather outdated mishmash of products and services without a discernible brand. Apparently, Huffington Post didn’t help that.