AOL's Armstrong: Realistic about the past, optimistic about the future

AOL chief Tim Armstrong talks about a comeback for AOL, one that builds on future opportunities and tries to keep mistakes of the past where they belong - in the past.
Written by Sam Diaz, Inactive

AOL has been through some rough times, a far cry from its hey-day when its Internet access CDs could be found anywhere from your curbside mailbox to the neighborhood grocery store. And as the company continues to deal with things like expense restructuring - including some painful layoffs - there's also a bright future ahead for the company, at least to hear new chairman and CEO Tim Armstrong talk about it.

Armstrong, a former Google SVP who was lured to AOL's top seat about 10 months ago, put some of his cards on the table during a 45-minute Q&A session at the Citi Global Entertainment, Media and Telecom Conference in San Francisco.

When he arrived nine months ago, morale was low and certainly no employee was out there banging his chest to boast AOL. He spoke, without offering up specifics, about poor investments, complex and segmented infrastructure and a poor Web experience with things like slow-loading pages.

But that was then, he said, and there's no sense dwelling on the past.

Despite the cutbacks, he said the company is upbeat these days, focused on making a name for itself in areas such as content, advertising and communications.

On the content front, one of the key differentiators is a system called Patch, a local news and information platform aimed at serving local towns and communities that became part of AOL with a June acquisition of PatchMedia.com. Sure, there's a lot of content on the Internet, he said, but local news is one of those areas that still offers a lot of potential for growth - and audience attraction (which, of course, leads to advertiser attraction.)

Content matters a lot to brand advertising, he said, and even though AOL isn't fully recovered and still has a lot of work to do, he sees AOL as being "light years ahead" of where it was and is positioning itself to compete with the Googles and Yahoos of the world in the Internet ad game. That wasn't something the company could have said a year ago, he said, but today AOL is being aggressive about reaching out to advertisers.

Though the recession was tough on companies across the board, it also forced companies across the spectrum to re-think spending and consider a shift to online or digital media - after all, that's where their customers were heading. That trend has been accelerated by the recession, Armstrong said. And AOL wants to have conversations with the advertisers about how to reach AOL visitors through a variety of channels, including social media.

In terms of search, Armstrong stressed that the company has to do what's best for the company - and noted that he no longer wears a Google sweatshirt, but rather an AOL one. He didn't specifically address the search deal with Google but said that, in the future, any deal would have to be financially beneficial to AOL as a whole, even if not apparent specifically for AOL's search business.

Google, he said, has been a good partner and would obviously "get first dibs" at continuing that partnership. But, he said, "Microsoft and other people are interesting partners, as well."

Asked if he considered Facebook to be a threat when it comes to grabbing advertiser dollars, Armstrong said he actually sees the social network as more of an opportunity for distributing content. The same goes for Twitter - those are just other forms of communication, something that AOL has had a strong role in with its e-mail and especially instant messaging platforms.

Could that be beefed up, as well, to reflect changing times? Absolutely, he said. With the right mix between things like IM, email. social and even sharing capabilities built into the content, there's a number of opportunities.

AOL has a way to go before it can turn the corner and it helps that Armstrong acknowledges that there have been blunders in the past - including "Hail Mary passes" to jump-start other businesses.

We won't be seeing that anymore, Armstrong said. AOL will build where it knows how to build, partner when it makes sense and monetize where it can. There's a "whole ocean of opportunity in front of us" and the company plans to tap as much of it as possible.

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