AOL Sits on a Gold Mine and Doesn’t Know It

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By Jacob Maslow

Columbus Circle
AOL Columbus Circle, NYC

AOL (NYSE:AOL) is under a lot of pressure the past few years. There are a lot of open questions regarding the future prospects of this company. AOL used to be the darling of Wall Street when it was run by Steve Chase. Back in those golden years, AOL was primarily an Internet service provider. Back in the turn of 21st century, AOL was one of the biggest ways that people access the Internet. Now that local telecommunication companies have gotten in on the action along with cable companies, AOL’s ISP market share has fallen dramatically.

In recent years, it has tried to reposition itself as a content play. The problem is AOL had the same issues other stock value rich Internet companies had. It’s worth a lot of money and can buy a lot of companies and throw digital money around at will. Not surprisingly, it did this a lot and has very little to show for it. The good news is that recently, under CEO Armstrong, AOL has ended up with major online brands like Engadget, Huffington Post, and TechCrunch. If it plays its cards right, it can develop a sustainable content model.

Make no mistake about, the Internet is all about content. As much as there is a lot of talk regarding Internet technologies more about evolving toward a user-generated or user interaction model like Facebook, content will always be king. There will always be space for directed content. I’m not talking about user-generated content. I’m talking about directed content. We’re talking about articles, blog posts, and other professionally-written content. Research is the main reason why people go on the Internet in the first place.

It really boggles my mind that AOL hasn’t realized that it’s sitting on a gold mine. These high-value content properties can really take AOL to the next level if it knows how to work content dynamics. There’s a lot of money to be made in content while reducing your cost. How do you do that? Getindustry experts and professionals to produce content for you for free. What they get is credibility, authority, and some commercial branding. What you get is free content. Unfortunately, AOL is not pushing this enough. Add-on to this a syndicated content where AOL content is broadcast on the channels of a lot of other partners. Layer on to this is an advertising technology where AOL can leverage its branded content to get advertising partnership in certain industry verticals. With the right amount of targeting and relationship building, AOL can turn its content into a moneymaking machine. Content is never going away. What is going away are outmoded ways of trying to make money off it.

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