Quick word-association test: AOL is …
What usually comes to mind are things like ancient, dial-up, uncool, web 1.0.
But maybe we shouldn’t be counting AOL out just yet.
Since Time Warner announced in a securities filing late last month that it may spin off AOL into its own company, Internet watchers have been, if not excited, at least intrigued at the prospect of a once-again independent AOL. The time might be right for a reimagining -- a “reboot,” a la "Star Trek” -- of a brand that has lost half its traffic and all its buzz.
It’s almost hard to see through the fug of the AOL name, but the company has a lot going for it, including a large user base, new management and diversified web products -- including the dial-up business, which is unglamorous but brings in revenues. Losing Time Warner will only accelerate what AOL is acknowledging is a need to do things differently in order to survive. (See accompanying story, "The Analysts Analyze AOL.")
Frequently called one of the most disastrous mergers in history, the $182 billion 2002 deal that united AOL and Time Warner took one of the biggest online brands and implanted it into a lumbering old-media corporate animal.
AOL was never again able to compete strongly with the Yahoos and the Googles of the world.
But what feats of reinvention might be possible with AOL off Time Warner’s back?
Even pre-merger, AOL had an image as uncool and boring, training wheels for the “real” Internet. As a brand it has not evolved much since then. In fact, nobody even wants to buy it. Google owns a 5 percent stake in it, which it has been trying to unload.
But AOL does have a massive user base -- it has 106 million unique monthly visitors and had $4.1 billion in revenue last year, though its ad sales were down 18 percent in the last quarter of 2008, to $109 million. (Yahoo had a 12 percent decline in the same period.)
Now, though, with a new CEO, Tim Armstrong, plucked from Google in March, and the chance to shed the layers of Time Warner bureaucracy and recharge a complacent corporate culture, AOL has a fighting chance to succeed in the web 2.0 world, analysts and observers say -- even with the weight of its old-timey name.
Among AOL’s strengths is that it is diversified within the Internet space, with operations in three main areas:
* The dial-up business, which sounds positively antique, but generates half the company’s revenues by offering Internet access to people still without broadband;
* Platform-A, its online ad network and brokerage;
* Its cluster of content sites called MediaGlow, which includes thriving sites AOL has acquired, such as Moviephone.com and gossip headquarters TMZ.com, and a growing number of original niche sites aimed at taking advantage of the fragmented web audience.
AOL even has its own social network, the relatively obscure Bebo.com,
