Posts Tagged ‘AOL’

Verizon Buys AOLIn the wake of last week’s announcement reporting that Verizon was acquiring AOL for $4.4 billion in cash, a colleague asked me, “Is AOL still relevant?”  The answer is a resounding yes, but not for the reasons one might think.

As a child of the 80’s and a proud, card-carrying nerd, I remember the days when 2–3 times a week, without fail, I would receive a CD in the mailbox exhorting me to sign up for the community of America On-Line. And in those days, the [sweet melody of dial-up] was the soundtrack to my adolescence.  Believe it or not, AOL *still* derives revenue from dial-up subscribers, somewhere north of $150 million per quarter.

With the rise of cable internet, this part of the business has become increasingly less and less relevant. Many of you may not even know it, but you are consuming AOL properties everyday:  The Huffington Post, StyleList, mapquest, TechCrunch and engadget are all owned by AOL.  And the infrastructure they have built behind these properties is very significant.  So while you may not have heard the soothing sounds of a modem in recent years, yes, Virginia, AOL is still relevant.

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Media Navel Gaze

The Week Unpeeled

You Got Merger! Verizon agreed to buy AOL for some $4.4 billion (chump change for the phone company), vaulting the telecom company into TV and online video and clearly marrying old school/largest telephone service in the US with the older of the new online services that owns HuffPo.

Elsewhere:

  • DuPont appeared Teflon coated last week when shareholders re-elected the current slate of board members, rejecting activist Nelson Peltz’s bid to join and putting in check for now direct pressure from the investor and his firm Trian Fund;
  • Avon was not calling but did become the center of a hoax of sorts when a bogus takeover offer was reportedly filed with regulators, sending the stock soaring and eventually forcing an FBI investigation and SEC probe;
  • Carl Icahn puts $100 million behind Lyft, creating no doubt some surge interest in the ride-sharing company;
  • The Amtrak wreck continued to lead stories with latest developments focused not as much on safety but possibility of a “hit” from a projectile before the crash;
  • Google is launching “buy buttons” on mobile search results, making it more of an online marketer;
  • A parade of bold names paid homage to David Letterman in recent days ahead of his final top-10 list this week, from Oprah to Obama amid heaps of media praise on how he changed the late-night format to more variety less straight talk;
  • The Dow ended the week up 0.45 percent to close on Friday at 18,272;
  • Blues legend BB King died;
  • The art-world exploded last week, with a Picasso selling for nearly $180 million and other records set as well; and
  • Receiving big pick-up all week, meta analysis now shows virtually no negative health risks associated with coffee; big gulp away!

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Media Navel Gaze

The Week Unpeeled

Amazon CEO Jeff Bezos bought The Washington Post last week for $250 million, a surprise to many including The New York Times, which had just published a big feature on the paper’s publisher, Katharine Weymouth, who remains as publisher and whose family has owned the paper for eight decades.  The Post had served as advisor to Amazon on designing the Kindle so Bezos was no stranger to management (and now being called a press baron – FT). No surprise though for all the media-covering-the-media coverage and stories of storied publishing families who have relinquished control:  Chandlers of the LA Times  and Bancrofts of The Wall Street Journal. Meanwhile, The New York Times was quick to announce that it is not for sale, even though it did sell The Boston Globe to the owner of the Red Sox, highlighting newspaper ownership today is really a who’s-on-first game.  Interesting graphic in The Times over the weekend showing the value of recent sales with Tumblr dwarfing others at $1.1 billion.

Elsewhere:

  • On the online news front, AOL announced that it was closing or finding partners for 400 out of its 900 Patch news sites, following in the footsteps of many major news outlets in saying the local online news model does not work;
  • The London whale, the ex JP Morgan trader who was tied to billions of losses for the bank, resurfaced amid reports that he will likely not face charges;
  • The bank also found itself as a target of  Justice Department probe;
  • Amid expectations for big withdrawals, SAC Capital reportedly may also be announcing layoffs sometime soon; and
  • The Dow ended its six-week winning streak to close down 1.5 percent for the week at 15,425 (although still up 18 percent for the year). End of Story
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The Week Unpeeled

The end of August ended with a bang on all fronts except the jobs front as the month turned out to be one of the “newsworthiest” in a long time, from the earthquake and hurricane on the East Coast to Murdoch to Jobs to Syria to London riots to S&P downgrades to the debt-ceiling debate to BachmanPerryRomney to wild market rides. Get the pic.  More recently and elsewhere:

  • Bad Labor Day News: The jobs picture dimmed considerably with zero new jobs created in August, the first time in a year when no jobs were added to the economy;
  • Focus now is on President Obama’s speech on jobs, scheduled for Thursday (after PR nightmare scheduling fights with the GOP);
  • Obama appointed Princeton economist Alan Krueger to be head of his Council of Economic Advisor, someone familiar to CJP when he worked with us on developing a proposed index for one-time client Adecco;
  • The US sued to block the $39-billion AT&T/T-Mobile merger (which is being argued about whether it will help or hurt the jobs picture);
  • The US also sued 17 mortgage institutions that sold loans that turned bad to Fannie Mae and Freddie Mac;
  • WikiLeaks cables were leaked; and
  • For the month, the Dow declined 529 points to end at 11,240 (September is usually the worst week for stocks, so stay tuned).

Tech Blogger to Become Investor

Interesting businesss/journalism/gray area story last week when Michael Arrington of TechCrunch fame announced plans to start a venture-capital fund to invest in Silicon Valley start ups, even ones he and staff may cover as bloggers. The $20-million fund raises obvious questions about conficts of interest. TechCrunch’s somewhat new owner, AOL, said Arrington will take a new role at the site, hire a new managing editor and continue to report to Arrianna Huffington (maybe not to ruin the perfect mashup of reporting lines and names). CJP

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AOLThere is an episode from The Simpsons (S9 E14, for the fact-checkers out there) called Das Bus wherein Homer starts up his own home-based Internet business called Compu-Global-Hyper-Mega-Net because he’s tired of everyone making money off of the Web except for him.

In the show’s climax, Bill Gates shows up at the Simpson home to “buy him out” which consists of Bill Gates’ “enforcers” destroying Homer’s office and breaking a bunch of stuff.  “I didn't get rich by writing a lot of checks,” Gates offers as the key to his success on the way out the door.  The moral: never mess with the alpha dog.

Over the last several months, we've seen AOL Media take a decidedly different approach to attempt market domination.  It has written several very large checks in what looks like an effort to achieve market domination in the media supply business.  High profile purchases of the Huffington Post and TechCrunch, among others, seemed to indicate that AOL was making a concerted effort to control the news stream, if such a thing were attainable.

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