AOL: Puff Daddy Parties and Cockroaches on NPR
BoomTown is winging across the country right now to New York City to attend, among other things, the analog version of the AOL spinoff from Time Warner (TWX).
Videos to come, of course!
A ringing of the opening bell for AOL and trading will officially take place on Thursday morning at the New York Stock Exchange on Wall Street in Manhattan.
This will be preceded by a party there tonigh, which will apparently feature an appearance by Diddy, who was sporting the Puff Daddy name the last time I was at the exchange for an AOL/NYSE event.
How investors will like AOL is the billions-of-dollars question, of course.
AOL went public on Nasdaq on March 19, 1992, under the ticker “AMER,” and moved to the NYSE on Sept. 16, 1996 trading as “AOL.”
While working on my first of two books on AOL–one on the company’s upward ride and the other going down–I actually attended both the fancy dinner the night before AOL moved to the NYSE from Nasdaq and the AOL party on Wall Street the next day.
And since I spent an ungodly amount of time writing that pair of tomes on AOL, the iconic once and–it’s hoping–future Internet giant, I get to be a loud-mouthed pundit on a variety of television and radio news shows this week.
Yesterday, for example, I appeared on NPR’s “Morning Edition,” where I used a term that has long been used to describe the hardy AOL: The “cockroach of the Internet.”
Here is the audio clip of the interview with Steve Inskeep:
And here is the transcript (you can also listen to it here):
STEVE INSKEEP, host:
A divorce becomes final this week. Time Warner finishes spinning off AOL as an independent company. That will end the story for what was just eight years ago the largest merger in history. Time Warner was supposed to provide content from its movies and magazines. AOL, the giant Web company, would distribute it and together they would own the world. That’s what was supposed to happen.
Author Kara Swisher has chronicled what really happened, and she’s on the line.
Ms. KARA SWISHER (All Things Digital): How do you do?
INSKEEP: So they, through this merger, were going to be were going to be the gigantic company. They were even bigger than Time Warner at the time, the gigantic company that was going to bring Time Warner’s content to the masses. What happened?
Ms. SWISHER: What happened? Humanity happened. There’s people involved and a lot of people didn’t like the merger at Time Warner and dragged their feet and didn’t do the necessary synergies that were necessary to make it work.
Secondly, it was part of a big bubble here in Silicon Valley. AOL was at the top of that bubble and when it burst, and it turned out there weren’t quite so many revenues attached to it as people thought, you know, that sort of changed things.
And the third thing was, it just, you know, people weren’t really ready. The Internet was well used at the turn-of-the-century…but Google actually just hardly existed.
INSKEEP: So were AOL and Time Warner just ahead of their time?
Ms. SWISHER: No. I think it was probably too big. I mean it was trying to combine these companies, media and the Internet, and just as today there’s struggles over, you know, over the music industry digitally, over movies, they’re still fighting these fights, so it was still a very difficult marriage for media–traditional media, I guess–and digital media.
INSKEEP: So Time Warner now kicks AOL out the door. AOL is a much smaller company than it used to be in terms of customers and revenues and everything else. What’s the next step for AOL?
Ms. SWISHER: Well, it’s tough because its main business, the dial-up [and access] business, it’s declining drastically, and every year it goes down by hundreds of millions more. And they’re relying everything right now on content. That’s their big play, is the idea of creating content on the Internet and selling premium advertising against it. And we’ll see what happens, but it’s definitely not the size and influence it was before.
INSKEEP: So does AOL in their ideal world basically become a USA Today for the 21st century?
Ms. SWISHER: Kind of like that. They’re kind of being like Time Warner a little bit, if you think about it. You know, Time Warner has all those magazines doing that stuff and not every bit of it’s, you know, high level journalism. A lot of it’s People Magazine and Sports Illustrated, so it’s a question of how much money you can make at this when a company, say, like Google is just manufacturing money in the basement there over these little search terms.
INSKEEP: How on earth can AOL make money creating its own content and selling it when they apparently couldn’t find a way to mine and sell all the content they had access to when they were part of Time Warner?
Ms. SWISHER: Well, that’s a good question also. But you know, they didn’t get a lot of access to it. That took forever. You know, Time Warner really is run like a separate kingdom and the magazine people at Time didn’t really hand over the goods, and so AOL was never able to take advantage of them in a really substantive way.
Same thing happened with the cable business. There was supposed to be a lot mergers of AOL distributed over cable, over broadband, which is a great idea, but the cable people resisted. The movie people, you know, it just went on and on and on.
INSKEEP: Sounds like you don’t entirely blame AOL for this failure.
Ms. SWISHER: Oh, I do. They were arrogant and rude and they came in telling people what to do and they, you know, they had all sorts of questionable issues around their revenues that sort of fell apart. So I think they created a situation where they promised a great deal of things and delivered almost nothing.
INSKEEP: Are they in better position now or with better management now?
Ms. SWISHER: Yes. Now they have an executive from Google, actually. Tim Armstrong is a very well regarded executive and he’s really changed the–he has brought in new managers–many of them from Google, fascinatingly enough. And they’ve laid off a lot of people and they’re going to sell off assets. They’re doing all the right things. It’s just a question of what’s left once they’re finished doing that.
INSKEEP: So do you think there’s going to be an AOL in five years?
Ms. SWISHER: You know what? Everyone’s always counting AOL out and they still manage. They used to be called the cockroach of the Internet and they kind of still are in a lot of ways. You know, they never die. They always fall down. And it was their image that they constantly reinvented itself. And so we’ll see. I mean they have survived multiple changes in their business.
Even–I mean before they got huge they were almost out of business a million times, and so we’ll see if they–if, you know, cockroaches, whether you like them or not, probably will survive the nuclear holocaust, so we’ll see. You know, we’ll see what happens if they can turn this into something. It’s not going to be the glory days of AOL before, but it could be something interesting.
INSKEEP: Kara Swisher is co-executive editor of All Things Digital, a tech and media blog owned by Dow Jones.
Thanks very much.
Ms. SWISHER: Thanks a lot.