AOL Automates Its Story Factory. Does That Kill an Associated Content Deal?
A couple of weeks ago, AOL told Wall Street it will be cutting its payroll by one-third, via buyouts and layoffs. Now comes its plan to make the remaining employees more productive: New technology that assigns and even edits stories automatically.
CEO Tim Armstrong tells The Wall Street Journal about plans he has previously hinted about–“a new digital-newsroom system that uses a series of algorithms to predict the types of stories, videos and photos that will be most popular with consumers and marketers.”
The idea is that even a brain-dead editor knows that people want to read about Tiger Woods–and AOL’s coverage includes a 500-slide (!) slide show. But there are plenty of other stories that will go unassigned without a computer’s help. For example:
AOL says its new system determined that the most popular topic on the Web last Tuesday was “crib recalls,” following news of a massive recall by Stork Craft Manufacturing of Canada. AOL had only one story on its sites on the recall. But, if the new system had been live, editors would have geared up to supply stories on the subject from a number of angles, the company says.
This is the flip side to AOL’s hiring binge of the past year, where it scooped up a small army of veteran writers and editors. And it has a certain logic to it. Why wouldn’t a publisher want to publish things that readers want to read and advertisers want to sponsor?
Of course, this also creeps the heck out of people with traditional notions of journalism, or even “content production.” Including some of those recent hires. The company has been trying to soothe employees’ fears, but given that AOL is letting lots of people go, you’re not going to hear many writers and editors carping about this openly.
Investors who are going to own AOL after it spins off from Time Warner (TWX) next month are supposed to be cheered by the plan. It has a hint of Google (GOOG) to it, which makes sense given Armstrong’s long tenure there. And it sounds very similar to Demand Media, the much buzzed about content-creation factory.
AOL’s plan also sounds very similar to Associated Content, a search-driven content mill run by Armstrong’s former co-worker, Patrick Keane. Armstrong also happens to be an investor in the site, which raised a $6 million B round last spring that valued the company at $43 million. And earlier this year, AOL explored a purchase, sources say.
But while Armstrong ended up buying Patch Media, another start-up where he was an investor, he never pulled the trigger on Associated Content. Question: Does his new platform make a future deal more or less likely?