Mon, Aug 20th 2007 12:47pm
Last year, in a move that came only six years too late, AOL decided that walled gardens were out and that free web services were in. For a brief period, there was a flurry of news about AOL's attempt to reinvent itself as a Yahoo-like portal. With the walls torn down, the challenge for management was to actually give people a reason to use AOL's services, thus driving up traffic and ad revenue. Simply being free would not be enough to bring people back unless there was a compelling reason. A year later, it doesn't look like the company has accomplished this. Earnings guidance was recently reduced as the company's growth rate continues to lag behind the industry average. As Wall Street gets antsy over its performance, it seems likely that we'll hear renewed calls for Time Warner to just dump AOL and finally wash its hands of the whole affair. AOL's problem is the same one facing Yahoo: it's not Google. The difference is that Yahoo still has a lot of market share and traffic to work with. Both companies have made several acquisitions in the past year or so in an attempt to reinvent themselves, but unless one of them stumbles onto the next MySpace, Facebook or YouTube, it's unlikely that acquisitions will hold the key to a turnaround.
If you liked this post, you may also be interested in...
- EU Regulators Can Barely Contain Their Desire To Attack Google And Facebook, Believing It Will Help Local Competitors
- Game Critic Keeps YouTube Vids Ad-Free By Creating ContentID Feeding Frenzy
- Techdirt Reading List: Free Books From Verso (Mostly)
- Viacom Once Sued YouTube For A Billion Dollars; Now It's Just Released Over 100 Movies For Free On YouTube
- Techdirt Podcast Episode 45: No, You're Not The Product