Once the focal point of social networking and a former stepchild of Time Warner, AOL may be writing its final chapter as a viable business. Spun off buy Time Warner in the fourth quarter of last year and declaring it's IPO status the same day, AOL (NYSE) is facing a tenuous future.

The chart that follows illustrates its revenue declines over the past few years. As subscribers leave (who needs a middleman to connect with the net?), ad dollars are sure to decline as well.

Click on the chart to enlarge.

What went wrong?

Is Time Warner to blame? Since its merger with the company in 2001, a decline of the value of the company was set in motion. Controversy concerning operations, billing disputes, account cancellation "scams" and subsequent investigations did not help its cause.

AOL was becoming a company in search of a purpose.

AOL is a matured company in a failed marriage that has not been able to keep pace with the shifting dynamics of a digital landscape. Its management is likely to blame, taking their eyes off the real prize ..... people.

Building a huge following with little regard for the followers (are you listening Facebook?) is a perfect recipe for failure.

It was fun while it lasted ....

AOL's stock graph since its IPO follows ....

Click image to enlarge


Anonymous said...

Paul - your commentary and assessment of AOL is SPOT-ON! As a former employee during the hay days of stock splits and greedy green eyed monsters - even pre-Time Warner - there was a sense that nothing was ever big enough for the management there to swallow up. An insatiable management style, led to a leader-less business operation who's "too big to fail" mantra proved disastrously wrong.

As always, you do a great job in uncovering the ugly truths about companies from a very knowledgeable and experienced point of view.

Keep up the great blogging!!

Anonymous said...

I enjoy what you guys are up too. This kind of clever work
and reporting! Keep up the fantastic works guys I've incorporated you guys to

Also visit my webpage - fasting diets