America Online (AOL), a household name that has taken a back seat in recent years since its merger flop with Time Warner, appears to be poised for a comeback. The Internet service provider gone ad publisher, which continues to provide dial-up service to more than 4 million people in the US constituting nearly half its revenue, made headlines this week with the acquisition of three technology firms, the most prominent of which was TechCrunch.
While these acquisitions are relatively small in scope for AOL, they are important because they signify the direction in which AOL is headed as a news source and ad publisher, a trend that seems to be about as mainstream as anything these days for large conglomerates. So is this really the right direction for AOL?
I guess that really depends on its goal, which seems to be a moving target. On one hand, AOL is committed to being a hub of sorts for trending topics and Internet videos, but then, isn’t everybody doing that? On the other hand, AOL CEO, former Google exec Tim Armstrong is quoted saying, “[P]aid services is an interesting part of our business and our future”.
So which is it AOL? Are you looking to drive traffic and publish ads, or are you looking to offer subscriptions to people beyond dial-up service? Technically AOL can do both, which it is clearly doing. But it seems to me that AOL is aiming to be where a lot of other big players already are, rather than where they are not.
For instance, visit aol.com. It reminds me of the old Yahoo.com homepage from a couple years ago. You have a header space with a search form, you have a column on the left side with a directory listing of topics, and you have a homepage compartmentalized with news bits from around the globe, some widget sections, and some advertising.
Another example are the ads AOL is running touting its new web page layout. It’s simpler, more aesthetic, and has less and better advertising than many of today’s looks, but it’s not that new. Apple captured this look half a decade ago, so why run ads on it?
What AOL needs to do is what I call, throw the long pass. It needs to invent new space like it did with dial-up Internet service. Selling subscriptions for security or fitness-tracking software makes AOL a software provider. Boo hoo. With obvious long-lasting emerging trends such as mobile computing, location-based marketing, or even energy awareness, maybe AOL would be best off pursuing options along these avenues.
Surely with so much history, capital, and newly acquired firms the big wigs can come up with a better mouse trap, something new, something that doesn’t exist yet, like something that better humanizes the technology experience which has become hijacked by big corporations to create a false sense of community. Right now what I see from AOL is mediocrity, not innovation.