But, before all of that money is gone, AOL CEO Tim Armstrong is using it to make big bets, primarily on the Huffington Post, a $315 million acquisition, and Patch, a nearly 1,000-journalist-strong network of local sites that continues to lose more than $100 million per year. The company is fast losing subscribers - and revenue from subscriptions. If you're not comfortable calling AOL a content company just yet, you will be in a year or two, when the transformation is complete. AOL is, primarily, a content company. "AOL is singularly focused on becoming the next great media company for the digital age, being rich, engaging and easy to find content and experiences for consumers and best-in-class environment for advertisers," CEO Tim Armstrong said in a statement that accompanied his company's second quarter earnings report. They just worried about sending out CDs and luring more people in, "selling connectivity to the Web, not an editorial product," according to Kramer, who wrote about the merger in 2009, a week after Time Warner decided to spin off AOL for good, in the Daily Beast. At AOL, according to Larry Kramer, a former Washington Post editor and one-time CEO and chairman of MarketWatch, "it was the equivalent of the 'circulation' and 'marketing' departments that ran the company." With AOL's customers forced to stay on the AOL platform, nobody worried about the quality of the editorial products being served. Editors ruled the halls and their product trumped all else. It's a content company with powerful brands, among them CNN, HBO and Sports Illustrated. If you're not comfortable calling AOL a content company just yet, you will be in a year or two, when the transformation is complete.Īt Time Warner, content has always been king. But the companies were too different, and their mismatch led to failure. The idea behind the 2001 merger sounded perfect: one of the world's largest distributors of online content meets one of the world's most recognized content-making companies. The two might make a much better pair the second time around. In December 2009, with a number of big companies talking about joining forces, PBS looked back at the AOL-Time Warner tie as a way to caution others PBS called AOL-Time Warner "one of the biggest failures in merger history." But here's a crazy thought: A decade after that merger, Time Warner and AOL are completely different companies. America Online acquired Time Warner for more than $165 billion in stock and debt in 2001 in what is widely regarded, retrospectively, as the worst partnership ever.
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