Following Peter Krasilovsky’s post on AOL’s 25th anniversary, CEO Tim Armstrong just gave a keynote interview with Mike Arrington here at the TechCrunch disrupt conference.
As is a common topic — and modus operandi in his stewardship of a transforming company — content took center stage. His rationale for taking the job had much to do with the philosophy that original content will be a growing source of value in a quickly changing Web. The second reason was an employee base at AOL that was tired of losing.
To the first point, AOL has lots of content assets. Recent marketplace events are also supportive, including Yahoo’s acquisition of Associated Content to build economically scalable content libraries. AOL meanwhile has about 200 user facing content brands and 4,000 journalists (about 500 of whom are full-time paid employees).
He argues this puts AOL above the negative connotation generally put on “content farms” creating the low value content, which he believes is devaluing content online. This gets a bit into AOL’s strategy with Patch. Expanding on the model, he characterized it as creating “platforms” out of towns — an interesting concept.
“There are many communities that don’t have the amount of info they should have with respect to living locally,” he said. “We are digitizing towns, dropping a journalist into the town and putting the entire town on one platform. Can you do 80 percent of the things for 15 percent of the cost? That is a fundamental to Patch’s model.”
An underlying challenge for AOL (and appropriate to its 25th anniversary) is accomplishing this whole content-centric strategy while separating it from the legacy access (dial-up) business. The majority of the company’s cash — $200 million last year — is generated from access, though it is dropping 30 percent per year.
“We want [access] cash and traffic separated from content properties,” he says. “It’s not a true measure of what the company will be in the future. Our goal is for content revenue to beat access revenue, but I don’t have a date for when that will happen.”