AOL Says Global Operations Not Worth It
One minute AOL is a media empire, while the other minute turns into total mayhem. Months after deciding to part ways with entertainment giant Time Warner, AOL is back to their consolidation ways by downsizing global operations in over 40 countries.
This news comes on the heels of reports stating AOL is planning on creating an automated, on demand content factory by partnering with cheap freelance writers.
After having to layoff over 2,500 employees last November, AOL’s Chief Executive, Tim Armstrong said, “AOL’s international operations have been wildly unprofitable,” said Armstrong. “That has presented issues for us in terms of what we want to focus on.”
Armstrong, a former Google Executive, has made a number of changes to the company’s operations since taking over the reins 10 months ago.
- Advancements in products such as e-mail, CMS (Content Management Systems)
- Changes to their homepage…reducing the total number of ads from 17 to 1 – which has cut down on load times as well as raised ad rates.
- Bring back products earlier developed (pre-Time Warner Merger)…Moviefone, MapQuest, and Winamp
With these recent revisions of AOL’s infrastructure and product development, on the surface it may look like a struggling and downsizing company. But as the Internet continues to grow and change, some of these once major online conglomerates are going to face pains in keeping up with tomorrow’s web.
With already profitable niche blogs, such as PoliticsDaily, Love.com, Engadget and Joystiq…they might just surprise us all by re-inventing themselves from former Internet provider to information provider.
Yes, we are seeing a close in some of AOL’s major international operations…however, this shouldn’t be a direct reflection on the future of AOL. I think the international expansion was done prior to the rise of social networking and the Web 2.0 generation. On some fronts (like the websites I just mentioned) AOL is widely successful.
Sometimes it’s necessary to unload and get ready for what tomorrow will bring. And, from the sound of things….it won’t include the high overhead which 40 offices around the globe entails.
AOL is betting that the future of online content creation involves hiring freelancers for pennies a word and pumping out articles based off of search trends…while retaining some professional journalistic standards.
It won’t be long till we see if they’re right.
