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AOL CEO Armstrong talks about home page redesign, company strategy

October 29, 2010 |  1:46 pm

AOL Inc., revving up its effort to breathe new life into a flagging brand and staunch steep declines in traffic and advertising revenue, is launching a splashy redesign of its most valuable real estate, its home page, showcasing original news, video and entertainment content that it hopes will drive more revenue and traffic.

AOL "We are going to be the company that does the hard work to deliver highly curated experiences for the consumer so that people don’t have to spend the time and energy doing it themselves," AOL CEO Tim Armstrong said in an interview.

The contrarian approach is a departure from conventional wisdom in Silicon Valley and from the social media push by rival Yahoo, which is increasingly focused on content shared by your friends. AOL has moved away from distributing content created by other companies and into creating content itself.

"We are moving away from where Silicon Valley is going where users self-service themselves," Armstrong said. "We are a full-service company."

This is big talk for a company with a history of big problems. But Armstrong said he's bullish: He has restructured the company, shed half the workers and imparted a sense of urgency. AOL also plans to sell land and four office buildings in Virginia that it no longer needs for $144.5 million.

"We are 10 times faster this year than last year. And we expect to be 10 times faster next year than this year," he said. "AOL is playing offense. We believe we have the right strategy and we are executing against it heavily."

He declined to comment on a rumored merger with Yahoo. But he did not deny them.

"If we had the opportunity to layer our strategy on top of more traffic and more partnerships, we would do it," he said. "We have no specific plans for Yahoo."

AOL is in need of a reboot and investors are relying on Armstrong, a former Google advertising executive, to deliver it.

U.S. visitors to AOL home pages from April to September declined 18% to 35.8 million, according to ComScore. In AOL’s second quarter, revenue declined 26%, with advertising revenue down 27%.

The home page, which is one of the largest sources of traffic for AOL sites, will feature more content than ever and different types of content at different times of the day, adjusting its focus for breaking news such as election coverage, the company said. It will also offer local news feeds and original video. A "cause marketing module" will promote charitable causes for AOL and its advertisers.

Investors will learn more about AOL’s efforts Wednesday when the company reports third-quarter results.

-- Jessica Guynn

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