Aol Plans to Succeed in 2011
The Wall Street Journal reports that Aol CEO Tim Armstrong is expecting to see Aol rebound in 2011. “I would be disappointed if we didn’t get back to what the market was doing,” said Armstrong at an investor conference. Aol is in the process of a massive restructuring changing their focus from being an ISP to becoming a major content provider through its various blogs and other online platforms.
While Mr. Armstrong believes that 2011 will be a much better year for Aol, it obviously remains to be seen as to whether or not he can revive the company. The company has already cut thousands of jobs in an attempt to become a lean, mean, content producing machine. Not too long ago, Aol launched an HTML 5 version of their mobile site as part of their strategy for content consumption on the go. Armstrong is doing a good job at putting together all of the pieces for success and he certainly has an excellent understanding of the advertising industry.
As to whether he can successfully execute the plan is another thing. The current plans indicate the introduction of newer and bigger advertisements on Aol’s web properties. The hope is that these new (bigger) interactive will cause “banner blindness” and will be more effective. Whether that will happen remains to be seen.
According to Armstrong the company will continue to make more acquisitions, which as a result means that Aol will not return cash to shareholders. Armstrong also stated that shareholders should not expect a stock buy back or a dividend. What do you think of Aol? Are they heading in the right direction?