Lifetime restructuring: Internet giant AOL has changed its strategy again

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 on the market, and some of them are still working (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 still meet the constantly changing market requirements.

Source: loosebolts
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The specificity of the realities of online business is such that many companies lose their market and cannot find it again. AOL has been able to avoid this fate several times. Can this be done now?

Prehistory

AOL Inc. - Internet company that owns a wide network of online publications, which 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 in 2001 she merged with Time Warner Inc. and separated from it in 2009, becoming an independent company.

Under the leadership of Tim Armstrong, the new CEO, AOL has, since 2010, set its course for 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 succeeded:

• to form a large portfolio of online brands - well-promoted sites with high-quality content;
• create a new high-performance IT platform for quickly placing advertising and managing it;
• to gain a foothold in the 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 (36% in revenue).
• AOL Networks (31% in revenue).

Brand Group includes publications and cartographic 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;
• Netscape and CompuServe Internet access services;
• antivirus and data protection software;
• AIM mobile chat application for AOL Mail.

AOL Networks includes:

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

However, conditions are changing again and the market (along with competitors who have come from other niches) throws a new challenge to the holding.

New deals and new strategy

In May, Megamind wrote that the AOL media holding was acquired by Verizon for $ 4.4 billion. She bought AOL shares for $ 50 apiece. This is 23% higher than the AOL weighted average share price over the previous three months. The Verizon property also included TechSrunch , Engadget and The Huffington Post .

The deal contributes to the development of such areas of the company as video broadcast via LTE and the Internet of things. In addition, at the disposal of Verizon will be an advertising platform AOL. Her estimate is $ 600 million. According to Verizon head Lowell McAdam, the immediate goal is to bring users, content producers and advertisers to a global cross-screen networking platform.

The head of AOL Tim Armstrong after the merger continued to lead the company, according to a press release from Verizon. Armstrong noted that the holding should become one of the leaders in the mobile device user segment. This will allow AOL to make a new step in its development.

Now we can state that the “new step” has been made. What kind of step Armstrong had in mind earlier is not known for certain. But the main thing is that this led to another restructuring.

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

Previously, AOL's marketing director, Alli Klein, pointed to the fragmentation and weak interaction between the brands that make up the AOL holding company. Taboola will help implement AOL's plans for the organization of the exchange of advertising content between the main resources of the media holding - AOL.com, The Huffington Post, TechCrunch, Engadget, AutoBlog, AOL Mail and MapQuest.

Restructuring

After a series of acquisitions and 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 platform ONE by AOL: Publishers. Tim Malman, president of Vidible , which became part of AOL in 2014, said yesterday to AdExchanger that AOL met publishers who wanted a “more open relationship” with the holding.

It should be noted that working with a single platform instead of separate services will save publishers money.

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

The core of the platform consists of Marketplace services (including Adtech and Ad.com), AOL On , Gravity, and Millennial Media , which was purchased 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 assess demand and pricing for their products.

"New AOL"

A year ago, Megamind wrote about Facebook and AOL's similarities. According to The Verge, 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, just like AOL did. Not so long ago, Facebook bought another IM platform - WhatsApp, right, as AOL bought ICQ. Facebook groups are AOL chat rooms.

Facebook's main business is the sale of ads in 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 primary means of distributing (including adware) content and wants to dictate its terms. This trend is clearly unprofitable for AOL customers, and in the end, AOL is losing 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.