Kara Swisher

Recent Posts by Kara Swisher

Bewkes Job No. 1: No More Stumble-Bumbling With AOL

quigo

As expected, from a story we broke in BoomTown more than a week ago, AOL confirmed it has bought the Israeli content-targeting ad network Quigo.

The sale price, said sources, was a lofty $300 million, around what Yahoo paid for data analytics ad network BlueLithium in September.

Well, it’s probably a good thing for AOL as it tries to turn itself from the onetime online digital home for consumers to what amounts to a glorified ad network.

That’s probably a good idea, given that the service has lost about one-third of its paying subscribers this year, which is no surprise after it went free. AOL now has just over 10 million, but is banking less on them than on selling ads all over the Web for its future.

Still, as sites like Facebook and others add users to their services, it is also more than a little depressing to me, given AOL’s history of pioneering the idea of a robust Internet community, where users created what former AOL top exec Ted Leonsis used to call a “permanent online presence.”

At the time of the merger between AOL and Time Warner at the turn of the century, AOL had more than 30 million such users, an audience that was bound to decline, given the lack of ability to take advantage of many opportunities for the company over the years.

I have always likened Time Warner’s handling of its AOL subsidiary–which I think comes a bit from its lingering corporate rage over the disastrous merger–to watching someone fall down stairs very slowly and deliberately.

At first you feel bad, and then you’re simply annoyed at the sheer waste of a once-great brand.

For example, it never built an ad network of its own (although former CEO Jon Miller’s purchase of Advertising.com was a lifesaver); it never spun the service off when it could have benefited from being on its own in terms of innovation; and it never made the kind of key acquisitions that would have kept its features fresh for users and prevented an exodus.

In my second of two books about AOL, called “There Must Be a Pony in Here Somewhere,” I jokingly referred to Dick Parsons, who recently stepped down as CEO, as a “noncarbonated beverage,” whose greatest legacy at Time Warner will doubtlessly be steadying the situation at the company after the merger mess.

Well, that’s been a good thing, of course, but it has also meant a stultifying recent record for AOL in years that have seen a really substantive boom in the Internet space.

In fact, the only real corporate focus thus far seems to be on jobs cuts, which is fine, but not exactly what I would call a vision for the future.

bewkes

Nonetheless, in his new job as Time Warner CEO, Jeff Bewkes (pictured here) still has a lot of opportunity going forward. The ad network is a good idea, as I said, but AOL faces a lot of competition in the arena from companies like Google, Yahoo and now Facebook and MySpace. And no slackers here.

And it is encouraging when AOL invests in interesting subsidiaries like Truveo and UserPlane, as well as holding a piece of content sites like TMZ.com.

Why not more focus on drastically improving its email and communications tools? Why doesn’t AOL double down in the fast-growing mobile market? And it still has great assets in pieces it owns like ICQ.

Even more interesting would be a spinoff of AOL or even a sale to a Yahoo or Microsoft, creating a more powerful entity in which Time Warner could own a big stake.

Incredibly, after horses that have left the barn at AOL, there is a lot AOL can be going forward.

The question is: Does Bewkes have some fizz in him to do it?


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work