AOL tries to recapture that start-up feeling
NEW YORK -- It might seem an odd move for a company that relies on money from advertising. Yet AOL is reducing the number of ads it shows on its home page and some other websites it runs.
The maneuver is one of the changes new CEO Tim Armstrong, 38, has brought to the long-struggling Internet company since he took over AOL in April. The former Google executive was hired to recharge AOL and lead its spinoff from Time Warner, undoing a legendarily disastrous deal.
To prepare for AOL's rebirth as an independent company later in the year, Armstrong and other executives say they are trying to recapture elements of the culture AOL had when it was a start-up — back when it was America Online and on its way to becoming the dominant provider of dial-up Internet access.
These days, AOL is focused on getting revenue from ads it sells for its own websites, like celebrity gossip blog TMZ, and for third-party sites, while the dial-up business slowly evaporates (though it still has 6 million subscribers). It's been a profitable formula, but revenue has been falling: In the first quarter, sales fell 23% to $867 million.
With 7,000 employees spread around the world, it's a stretch to think AOL can feel like a Silicon Valley start-up, with employees whizzing down the halls
on skinny scooters. But Armstrong says certain decisions — like getting rid of some advertisements — will alter AOL's culture and help it regain favor.
"I think AOL's return to higher prominence in terms of being an Internet leader is purely dependent on the work that we do here," the tall, affable Armstrong said in an interview.
For instance, he said, pulling back some ads — a step that reduced clutter on AOL pages and made them load faster — showed that consumers were the company's first priority, given that the move could sacrifice some revenue.
"We are on a long journey and sometimes you do have to make short-term trade-offs for that long-term gain," said AOL's new head of advertising, Jeff Levick. He also came from Google, where Armstrong oversaw the company's North and South American advertising operations.
