AOL made its spin-off from Time Warner official Thursday, with executives including chief executive Tim Armstrong ringing the opening bell at the New York Stock Exchange and holding a press conference to trumpet its figurative “rebirth.”
“It’s an exciting day for AOL,” Armstrong said. “We believe the next wave of the Internet will be focused on content.”
Armstrong said that executives have spent the better part of a year preparing for AOL’s spin-off from Time Warner, and the result is a “very scaled” content-driven Internet company. He added: “We wouldn’t be here if we didn’t think the company had a bright future.”
But the backdrop wasn’t quite as bright. Stock analysts weighed in before the bell, skeptical about AOL’s future.
"All of the company’s segments are in decline," Merriman Curhan Ford’s Richard Fetyko told investors in a note.
According to the Associated Press, AOL has about 5.4 million Internet subscribers, down from a peak of 26.7 million in 2002.
"If the new management team cannot fix user engagement," Broadpoint AmTech’s Benjamin Schater wrote, "most of the other initiatives will not mean much."
After the bell, AOL’s stock was trading at $23.26 per share by 11:00 a.m., down about 1.77 percent.
When asked about the early dip, Armstrong said: “I haven’t looked at it yet.”
Last month, AOL tried to position itself as a leaner company, announcing that it would shed 2,500 jobs, or about a third of its workforce, in an aggressive cost-cutting move aimed to appease future investors.
On Thursday, Armstrong hammered his point about “scale” and “content,” pointing out that 80 percent of AOL’s content is original – a key differentiator from competitors like Yahoo and Google, he said.
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[Image via Wired]