AOL’s Tim Armstrong begins charm offensive to repair service’s image

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Let’s start with the burning question on everyone’s lips: Why would a senior executive leave Google to take the helm at America Online, the 25-year-old Internet company that Silicon Valley has discounted as a has-been?

The response may befuddle the tech-obsessed, who have turned their attention to instant publishing platform Twitter and sprawling social network Facebook.

‘AOL is in a very good space to be a player in the future of the Internet,’ Armstrong said at Fortune’s Brainstorm Tech conference in Pasadena.

Huh?

Armstrong wants to use AOL’s still-sizable online audience (106.5 million visitors in June, according to comScore) to compete against Yahoo, Microsoft and Google on display advertising. He’ll use the information gleaned over the last quarter century to provide targeted ads -- and try to capitalize on AOL’s ‘massive investments’ in advertising networks to compete for banner ads.

This, Armstrong argues, will position AOL for the day when the advertising market recovers from the current recession.

‘Every corporation, they have two dump truck loads of money,’ Armstrong said. Advertisers will decide how much money to send down ‘Traditional Media Lane’ and how much will head for the Internet. ‘My guess is they put more money in the Internet truck. And AOL has a big house -- a nice property -- on that lane. Can we get the trucks to stop?’

As part of making AOL an appealing destination for advertisers, Armstrong said he would emphasize specialized content -- although he didn’t volunteer much by way of specifics. The company will drag its MapQuest service into the modern era, incorporating local information, he said, and find new ways to unlock value from AOL’s communications stalwarts, including e-mail and AOL’s Instant Messenger.

Armstrong has also decided to hang on to some assets AOL had planned to sell, including video search engine Truveo. Bebo, the social network that AOL acquired last year for $850 million, will exist as a separate entity run under AOL Ventures.

-- Dawn C. Chmielewski