As reported in FT today - AOL is to cut 20% of the workforce or 900 staff. The axe falls on content production staff as a result of AOL’s recent acquisition (for $315m) of Huffingham Post and, before that, of TechCrunch. Over 2000 people had already left AOL in Q4 2010.
CEO, Tim Armstrong, has a tough job. AOL (according to reports) still makes 80% of its profits (not revenues) from dial up internet access. Reports recently suggest that many of these are old people who just don’t realise they are still paying $25 pm for a service they no longer get because they have moved (or could move) up to Broadband. To call this a “dying market” seems somewhat cruel! The market doesn’t have the greatest faith in the Armstong plan either – marking the stock down another 25% since his arrival.
Against this background, I’m really looking forward to the next Prince’s Trust Internet & Media Leadership Group (IMLG) lunch on 24th March (see Lunch with Tim Armstong although it is only open to IMLG members) which is being addressed (and sponsored) by Tim Armstrong (CEO of AOL) who is also bringing along the ‘media darling’ Arianna Huffington too. A double bill to die for.
Footnote – The IMLG, which I was instrumental in forming a year or so back and is now so ably chaired by Simon Paterson of SilverLake, has been a huge success; attracting over 20 members in a very short time. Latest is FaceBook – the first time they have supported any charity in the UK.