As AOL prepares to spin off from Time Warner in an IPO, it wants to gussy itself up so that it looks as appealing as possible tp ublic investors. Today, AOL disclosed that it plans yet another restructuring which could cost as much as $200 million. The biggest cost savings from any restructuring is usually through layoffs, and the latest round has already started at AOL, with 100 let go this week and as many as 1,000 of its 6,000 jobs at risk of being eliminated.
Despite new leadership under CEO Tim Armstrong, AOL has yet to turn around financially. Last quarter, revenues sank 23 percent to $777 million. The biggest drop came from subscription revenues to its legacy Internet access business, down 29 percent, but advertising revenues also took a hit, down 18 percent. AOL depends on display advertising, which has not yet rebounded like search advertising appears to be doing.
By cleaning up house and removing as many costs as possible before the IPO, Armstrong is trying to make AOL as lean as possible. But eliminating salaries and benefits can only go so far. He has to show that his new content strategy can create actual growth as well.
Will a company survive without the talent . I think firing people to make it attractive to investors is totally insane
Sadly, the trend these days is just that. If a company can trim off staff, it actually does in fact boost the stock price. See the recent Adobe layoffs for an example.
Many investors see tech companies as ‘bloated’ right now. Especially those tech companies that should be doing better than they’re currently doing. Let’s just hope it’s not the same situation 12 months from now.
They dont have a cohesive coordinated talent strategy that’s why they are falling through floor. patch.com as their local social strategy is not gonna help them. Anyone know their mobile location ad strategy?
AOL!! AOL!! AOL!! This is exciting. You have to give AOL street creds for news content, IPO!!! IPO!!! IPO!!!
” Youve got Talent”
I think AOL is late to the game. I am not sure if they can survive with their new business model.
According to some post on TC about a week or 2 ago, I thought they plan on hiring 3000 new blog editors?
Any truth to that?
How does AOL even make money any more? Are that many people still paying for dial-up? If this company were not bought up by Time-Warner, they would have been bankrupt a long time ago.
Didn’t AOL buy Time-Warner when they were over valued (like Twitter) not the other way around?
Yes, AOL did “acquire” TW. It shows who won the boardroom brawl though.
What makes you believe all of its revenue comes from dial-up?
AOL IPO in 2010 = LOL
Will the AOL Transit Data Network go with AOL in the IPO or stay with Time Warner?
$850 MM for Bebo, now valued internally at AOL for only $45MM if you can believe it.
That’s $805MM write-down coming down on the public.
Take that yours investor bag holders.
Good Luck AOL.
Matt
Something tells me this AOL IPO won’t go as well as their last one….
You always have tp worry about ublic investors.
“as appealing as possible tp ublic investors”
Are you serious Erick? Talk about editor FAIL first you can’t understand basic accounting skills in your Intel article and then you make such an obvious spelling error. Geeeee where’s the quality anymore
“As AOL prepares to spin off from Time Warner in an IPO, it wants to gussy itself up so that it looks as appealing as possible tp ublic investors.”
should be “as possible to public investors.”
No one edited this before publish?
You must be new here.
AOL – who in the hell uses AOL anymore?
Over 200 million people a month do… not including the 6 million dial up subscribers
Lots of page views…