The “hands-off” promise is both necessary to make and impossible to keep.

I remember hearing the promise from Jim Bankoff, who engineered AOL’s acquisition of Weblogs, Inc. in the fall of 2005, at a Weblogs retreat in New York. (Bankoff is currently CEO of Vox Media.) He meant it, and Weblogs was indeed given a long leash. Jason Calacanis, Brian Alvey and Judith Meskill operated the blog network as before the acquisition, with better technology infrastructure and a better hiring budget.

I was editorial director of Weblogs, and eventually took over business ownership of the unit after the founders left the company. For four post-honeymoon years in that position I had a close-up view of how multiple stakeholders in a large parent company systematically and necessarily break the well-intended “hands-off” promise. Even on a long leash, the startup plays a sometimes ferocious defensive game to maintain cultural and brand integrity.

David Karp will continue to own Tumblr within Yahoo, but he will not be the only owner. Marissa Mayer will be co-owner. Mayer was already — in the same hour as the obligatory “hands-off” covenant — outlining possible changes. Other departmental executives will surface in Tumblr stakeholder roles, especially sales, business development, legal and the editorial team of Yahoo’s main portal. Putting Tumblr into Yahoo is like throwing a boulder into a lake, and many executives will be accountable for maximizing the ripples. They are all co-owners.

Mayer specifically addressed the branding concern, promising that Yahoo would not slap its mark on Tumblr pages. That’s a no-brainer, although Yahoo has fallen into the trap of over-valuing its brand in past acquisitions, notably Flickr. But some degree of co-branding is inevitable, probably immediately, if Yahoo wants to capture comScore recognition of Tumblr’s traffic.

And it surely does. Major Internet properties, and their advertisers, are acutely aware of comScore positioning. At AOL, within minutes of comScore’s release of its monthly traffic report, I watched that thing rip through the company like a viral meme. In March of this year, Yahoo’s total U.S. traffic (that’s the filter most companies and their advertisers look at) put the company in the No. 2 spot, trailing Google by a mere one million unique visitors. That same month, Tumblr was credited with 29 million uniques. A certain post-acquisition bet is that Yahoo will do what it takes to vault over Google into the top slot.

And it takes co-branding. ComScore requires some mark of affiliation to acknowledge and report the traffic roll-up from an independently branded property to its parent entity. That’s why you see AOL’s logo in the footers of Engadget and TechCrunch, two sites where AOL’s mark hardly contributes brand charisma.

ComScore roll-up branding doesn’t really damage a professionally-produced editorial site. But there is greater sensitivity in a UGC (User Generated Content) destination where there is huge overlap of those who consume the content and those who produce it. The uproar among Tumblr bloggers over the acquisition is the first sign that the engine of Tumblr’s success does not want any affiliation with corporate overlords.

Speaking of UGC, it represents all sorts of trouble that will bring new influences to bear within Yahoo. Advertisers do not like appearing next to UGC. They don’t even like comments on pro sites, never mind the roiling swirl of unregulated blogs. Yahoo will create a monetization plan (Mayer is already leaking ideas and aspirations), and the company’s board and executive committee will synchronize Tumblr’s revenue potential with the drumbeat of quarterly reporting. Forecasts, operating budgets, timetables and deliverables will seep into the sales organization like wine into carpet. In meeting after meeting between sales and content, sanctity around Tumblr’s exemption from business as usual will be chipped away. To a category sales director, “hands-off” means not meeting a revenue deliverable, and getting a reduced annual bonus.

Advertising on Tumblr blogs is easy to predict, although who knows when. Run-of-service campaigns are clearly impossible for brand advertisers, and would be even without the heavy load of Tumblr porn blogs. The ability to produce specially-carved campaigns will have to be built into the publishing system, if it isn’t already. That slippery slope leads to possible special arrangements with highly-trafficked blogs, and a possibility of editorial management to some degree.

Enter the lawyer stakeholders. Yahoo’s legal stance for Tumblr will be based on “safe harbor,” a protection in the Digital Millennium Copyright Act that applies to UGC platforms whose owners do not exercise control of the content. Safe harbor is punctured like a balloon with the first bit of content oversight. If that happens, every legal complaint brought over publication of copyrighted media becomes Yahoo’s liability for damages, even if the infringing media is removed. (With safe harbor protection, Yahoo only needs to remove the source of a legal complaint.)

Online advertising is a buyer’s market in which advertisers often dictate terms and conditions. Tumblr will be caught in the tectonic grinding of conflicting interests. Tumblr’s founding principles demand freedom. Yahoo’s business requires revenue from the hordes of Tumblr users. The legal wing values safety above everything. The next quarterly always looms, and the questioning for years will be about Tumblr’s income, just as with AOL’s Patch and other daunting monetization projects.

Let’s not forget about synergy, the great M&A buzzword that informs all discussions leading up to the big purchase. Any company with many moving parts must consider how a major acquisition is going to play nicely with its other brands, technologies and cultures. An acquisition that brings a substantial audience with it is eventually going to be asked (which is to say, required) to share that traffic. If synergy is a dominant pre-acquisition buzzword in large content companies, recirculation is the post-acquisition mandate.

From this essential business goal comes a creeping incremental destruction of purity. The first sign might be a modest, inconspicuous footer on Tumblr blogs with softly-hued links to other Yahoo properties. Giving away that inch could result, a year later, in dreaded “related links” modules in the sidebar. From there it is a bold and victorious leap to universal headers with full co-branding and drop-down promos for Yahoo’s Mail and News enterprises.

I’m being cynical, and these are not explicit predictions. The honeymoon period is characterized by respect and caution. Weblogs brought completely new DNA into the AOL organism. Tumblr is likewise fresh air — loaded with a young demographic — for Yahoo. But Yahoo also has experience with social content (Delicious and Flickr), and Mayer is certainly determined to chart a better roadmap for Tumblr on her watch.

But the pressure will be on, sooner or later. Many jobs are a little more at risk when a company has spent over a billion dollars, and Tumblr will start showing the smudges of many fingerprints. It might all work out well. Nearly all of AOL’s most successful content destinations were acquired. (Others, like Bebo, were catastrophic, and the high burn rate to maintain Patch is controversial.) Tumblr could be Yahoo’s most successful bet, despite the many hands that will inevitably be laid upon it.

Brad Hill is the former VP of Audience Development at AOL, and former General Manager of Weblogs, Inc.

Changes at AOL’s local content site, Patch: CEO Jon Brod will step down and is being replaced by COO and President Steve Kalin, according to an internal memo the New York Internet company sent to the division’s employees today.

As part of the move, Brod will be going back to run AOL Ventures, in a job where he began at the company.

In addition, sources said a little less than three percent of the 1,400-employee Patch staff will be laid off. The memo notes that downsizing, without giving the numbers, which includes consolidation of several parts of Patch by streamlining its regional structure from 20 to nine teams.

According to the memo, the layoffs are to “make Patch profitable in 2013 and a commitment to continue to improve our business model.”

AOL confirmed the contents of the memo, saying in a statement, “Patch is streamlining its regional editorial structure across the country by moving from 20 to nine teams. We are implementing this team approach based on the success of our field tests earlier this year. The team approach allows for flexibility based on the unique needs of each community and the strengths of our editors. We are not reducing our number of sites or our coverage area as a result of this change. Making these important changes came with the difficult decision to eliminate some positions. We recognize these changes are painful for individuals and for our organization — and we are committed to handling the people impacted with care and sensitivity.”

Patch is growing, according to comScore. In April, traffic was up 26 percent since last year to 13 million unique monthly visitors, who are consuming about 1.3 million pieces of content that are now being served up per month.

Still, Patch has attracted a level of investor pressure and criticism, even as AOL CEO Tim Armstrong has stuck strongly with the hyperlocal content effort and invested heavily in growing out a network of sites across the country aimed at neighborhood news and events.

But Armstrong signaled changes when he was queried about Patch during AOL’s recent quarterly call: “What you’re going to see as we approach Q4 is us trying to get to the finish line of profitability, and we will use all means possible to get there.”

Apparently, Armstrong means what he says and says what he means.

Here’s the memo:

Patchers,

Since the day Jon, Warren, and I founded Patch, we have had one mission in mind — improve the lives of people in local communities by 25 percent. Patch has become an important brand in the hundreds of towns we serve, and it is a staple of our communities. With the average Patch just over two years old, we are well on the way toward our goal of improving peoples’ lives and building a sustainable business in the process.

Over the past year, Patch has made an enormous impact in our communities. The coverage of the Boston Marathon bombings, the lifeline that Patch provided residents during the Sandy Hook school shootings and Superstorm Sandy, and the exclusive Sanford-Colbert Busch debate in South Carolina stand out as powerful examples. The new Patch platform that is rolling out now will only increase Patch’s ability to instantly improve communities.

As we have made a commitment to improve our Patch towns and communities, we made a similar commitment to make Patch profitable in 2013 and a commitment to continue to improve our business model. Just as we have rolled out new products and services to Patch, we are announcing today the rollout of the recently tested town structures, which will help us serve communities in a more local way and move Patch meaningfully toward profitability.

The changes have two main goals:

1. Improve and increase our hyper-local programming and deepen our user engagement through the Patch 2.0 platform; and
2. Implement a structure that unlocks the path to profitability.

To accomplish these goals we are taking the following steps, effective immediately:

We are combining the East, Central and West editorial zones to create a simpler structure that will enable faster decision-making and a more coordinated editorial effort across Patch. Anthony Duignan-Cabrera has been promoted to VP, Editorial Director, overseeing day-to-day editorial field operations, and will continue to report into Rachel in her role as Chief Content Officer.

We are streamlining our regional editorial structure across the country by moving from 20 to nine teams. We are not reducing our number of sites or our coverage area as a result of this change.

We are promoting Katie O’Connor to Director of Editorial Operations and Content Strategy. In this role, she will work with our editorial teams to help create new content and programming.

We are implementing a “team approach” for our sites, based on the success of our field tests earlier this year. This approach allows for flexibility based on the unique needs of each community and the strengths of editors.

Jon and I have decided to elevate Steve Kalin to the CEO position at Patch. Steve has done a fantastic job since he began at Patch in December as President and COO. Jon and I hired Steve with the thought that his extensive background in scaled, local platforms would eventually allow him to run Patch on a day-to-day basis.

Jon has led Patch since it was just an idea and helped scale it into one of the most significant brands in local communities in the U.S. Under his guidance, Patch has gained tens of millions of users and more than ten thousand advertisers; and it has covered millions of local stories. Going forward, Jon will return to AOL Ventures full-time and lead our push into several areas we have identified as significant future growth opportunities for AOL.

The changes we are making at Patch, however, come with the difficult decision to eliminate some positions. These employees have contributed greatly to Patch’s business with passion and dedication. We sincerely thank them for all they have done to make Patch what it is today. Their impact will always be felt here. We wish all affected employees continued success. They are truly Patchers for life.

This is an important time for Patch. We have many great opportunities in front of us, and we continue to make decisions to ensure Patch’s success. AOL’s Board of Directors and I remain firmly supportive of Patch and our mission. Together we are building a company for the long term, one that can grow and thrive — now and far into the future.

We will be having team calls today and a Patch All-Company call this afternoon at 6pm ET, to discuss these changes in more detail. I encourage you to join these calls. Keep an eye out for invitations to follow.

I want to thank you for your continued commitment to Patch and to serving your communities, and for staying focused on our goals. Patch is one of the fastest growing sites and brands on the Internet. We have the right plan, we have a great team, and I’m confident we can win together.

Keep going — TA

As important: Its underlying numbers look pretty good.

AOL earned 32 cents a share on revenue of $538 million; the Street was looking for 34 cents and $534 million.

We’ll see what investors make of that, but I assume they’ll be heartened by the fact that AOL ad sales are up 9 percent across the board, and that domestic display ads, a bugaboo for Armstrong in the past, are up 6 percent.

(Update: AOL points out that Firstcall had its earnings pegged at 32 cents, which would mean its numbers were in line; I’ve also seen estimates that pegged earnings above 35 cents. There’s a whole lot less science to this than people like to let on. In any case, the Street doesn’t like something about this quarter, and has pushed AOL shares down 10 percent this morning.)

Here’s AOL’s description of that jump: “Domestic display revenue growth reflects an increase in AOL Properties impressions sold, including video and mobile inventory, and improved reserved pricing related to the sales of video and other premium formats.”

AOL still — still! — makes all of its profits from its subscription business, which is both mind-boggling and not news. That unit threw off $146 million in operating income last quarter. The company’s “brand” business — that is, its ad business — lost $4.9 million.

That’s better than the $16.8 million it lost a year ago. AOL said it would have been better, but that it has been plowing money into Patch, its controversial local play, as well as “editorial and engineering staff at our core brands and in our sales force domestically and internationally.”

Now we’ll see if Tim Armstrong can keep it going with his third-quarter results. The good news: AOL beat Street estimates for revenue and earnings, and its revenue number didn’t decline — the first time that has happened in seven years.

Not-so-good news: The company’s key domestic display number slipped 3 percent, and overall display sales were down 1 percent. AOL’s overall ad business was up 7 percent in the last year, though, pushed up by AOL’s network ads and its search business.

Here’s AOL’s explanation of what happened to display sales. Note the shout-out to Patch, Armstrong’s controversial bet on local: “Domestic display revenue declined due to a reduction in the sale of reserved inventory, but was partially offset by an increase in the number of impressions sold through Ad.com, growth in reserved pricing due to the increased sales of premium formats and video and strong revenue growth from Patch.”

Another positive sign for Armstrong: He has reversed the declining traffic numbers for the sites AOL owns. Those are up 4 percent over the last year:

We’ll see how Armstrong positions the company to investors during his conference call, which starts at 8 am.

After buying the Huffington Post for $315 million, AOL gave Ms. Huffington editorial oversight of all its properties, including tech-news site TechCrunch, the patch.com network of local news sites, MovieFone and MapQuest. In addition, more than 30 AOL properties, such as Politics Daily, were absorbed by the Huffington Post.

Read the rest of this post on the original site »

I’ve never worked for a company that has been as scrutinized, criticized, and coal-raked as this one. … We have critics on Wall Street, critics in the media, local critics, national critics, the business press, the journalism reviews, bloggers, etc. There are so many that I’ve come to think of them as a single large, screechy, off-key band called BI and the Haters. It’s music to kill yourself by.

– Patch editor in chief Brian Farnham bids farewell to AOL’s network of hyperlocal sites and its critics

Have you never heard of Starboard Value?

Me, either!

But the New York activist fund is readying to make a splash as soon as today, several sources said, if it follows through on the expected naming of an alternate board to challenge AOL.

Saturday is the official deadline to nominate directors to the board of AOL, also based in New York, which will have all eight up for reelection.

Sources said Starboard has talked to several Internet types, but that it has plans to put up a slate made up more of Wall Streeters to present at the company’s annual meeting later in the year.

In a filing last week, Starboard said it had been in discussions with AOL management about its concerns, so it is certainly possible the investor and the company could come to some agreement over board seats and strategic direction before it gets Yahoo-ugly.

That would make it a kind of an East Coast proxy battle version of what’s been going on over at Yahoo and its tussle with Third Point’s Daniel Loeb. He recently followed through on long-expressed unhappiness with the Silicon Valley Internet giant, and named a slate of directors — including well-known media exec Jeff Zucker — to replace current ones there.

The same kind of thing has been in the works at Starboard, which sent a letter in late December to AOL CEO Tim Armstrong, saying his much-touted strategy around content was not a good one for investors.

Like Loeb at Yahoo, Starboard is one of AOL’s largest shareholders, with a stake of just over five percent.

The letter signaled an increasing impatience with the pace of Armstrong’s turnaround efforts, which are still in turnaround. Meanwhile, AOL’s stock has rebounded from last summer’s lows of near $10 a share.

The stock is up more than 22 percent this year, to $18.44. But that’s still down almost 20 percent from when AOL spun off from Time Warner and went public in late 2009.

The grumpy (and opportunistic) Starboard entered the picture late last year.

According to The Wall Street Journal:

“Starboard, which focuses mainly on small-cap companies, was spun off from Cowen Group Inc.’s Ramius Capital LLC in March. In October, the fund successfully waged a proxy fight against hair-salon chain owner Regis Corp. when three of its director nominees were elected to Regis’s board. AOL, which was spun off from Time Warner Inc. in 2009 after a failed merger, is its most high-profile target yet.”

One of the investment fund’s bugaboos is Patch, the local news network that AOL has sunk a lot of dough into. Also under fire is Armstrong’s content efforts and the pace of its display advertising sales, including the high-profile acquisition of the Huffington Post and TechCrunch.

I have emails into all the bigs at AOL and Starboard, so we’ll see who calls back first, if at all.

Nintendo Wii U
The gaming company didn’t have a spot on the show floor at CES, but Nintendo offered private demos of its upcoming Wii U console, the successor to the popular Nintendo Wii.

The “new Wii” comes with a 6-inch tablet-like motion sensor control that offers a full touchscreen and alternative views of the game being played on the TV set. While using a larger controller to play games might seem cumbersome at first, the interactive options it adds can be fun. The new console also works with the standard Wii controllers, as well as the Wii Nunchuk and Balance Board. It supports 1080p HD output, and the games in the demo were remarkably crisp and clear.

But there are still more questions than answers about the Wii U. Its launch date is still pegged to sometime in the later part of the year, but exactly when and how much it will cost is still unknown. And while Nintendo was the front-runner in motion-sensor gaming with the Wii, Xbox Kinect, in the meantime, has been setting new gaming-console standards with its gesture-control technology, content partnerships and even basic voice command.

When asked about content partnerships in the works, Nintendo declined to comment on any specifics. As for voice-recognition technology, Nintendo also declined to say whether it would be added to the Wii U prior to launch; the company did point to some audio capabilities built into the tablet-like controller, and said it is exploring all kinds of possibilities right now.

Samsung Dual-View 3-D OLED TV
That’s quite a mouthful for a television set, so let’s simplify it: This is a TV that lets you watch two programs at the same time on the same screen — and not by creating separate boxes within the screen. Instead, users wear active-shutter 3-D glasses, and each wearer has a different 2-D image projected to them, or even a different TV show or movie.

What about audio, you ask? Good question: The audio for each program is streamed right through the glasses, so you’ll hear your own program, while your significant other sitting on the other side of the couch will hear his or her choice of entertainment.

A dual-view screen has a certain appeal for gamers, and both Sony and LG have introduced such screens for gaming purposes.

For the average TV watcher, this is notably both high-tech and isolating.

LG’s Blast Chiller
You might have heard about this one by now. We still think it’s cool, no pun intended.

It was apparent at this year’s CES show that appliance makers think we want fridges that tweet and washing machines that send messages to smartphones when the laundry is done. While interconnectivity within the home is still in its teenage — if not even earlier — stages, there was one feature of LG’s refrigerators that seemed quite smart: The Blast Chiller is a compartment that chills cans of soda or beer in about five minutes, and can cool down a larger bottle of wine in about eight minutes. It will be available in LG’s new line of refrigerators — price is unknown, but current models cost around $2,500. The Blast Chiller was definitely a favorite with conference-goers — likely because, by the end of the week, many may have wanted a cold beverage.

Corning Gorilla Glass, the Sequel
You might wonder where glass fits in at a tech show, but this isn’t just any soda-lime glass: It’s the ultra-thin, chemically strengthened Gorilla Glass that forms the displays of many smartphones and tablets, and even coats some laptops. Last week, Corning showed off Gorilla Glass that was 20 percent thinner and just as durable (which I was unable to break with a metal stick, as you can see from the photo here, although you might not want to use my arm strength as your gauge).

Gorilla Glass can be used to create stronger, brighter product displays, the company said. Last year, Corning had also said that it believed the future of glass was “3-D” or flexible glass that can be used in different form factors, including keyboards and kitchen countertops. At CES, the company showed how Gorilla Glass 2 can be used in home appliances and dashboard display systems.

Sleeper Pick: “The Patch”
As anticipated, armbands, accelerometers, exercise gear and health-and-fitness-focused apps dominated the digital-health section of CES this year (and even Jawbone’s UP armband made an appearance). But if you’re not ready for a full-time commitment to some of these devices, BodyMedia and Avery Dennison have come up with a temporary adhesive patch to test your resolve. Meant to be worn on the back of the left tricep for up to seven days, the patch combines the sensors of BodyMedia armbands with Avery Dennison’s wearable tech to aid in weight-loss management.

The patch is still awaiting U.S. regulatory clearance, so it may not be available until the third quarter of the year, or later. I’m told it will be less expensive than BodyMedia’s armbands, which run from $150 to $179 (and now work in conjunction with a new digital-wellness platform from fitness guru Jillian Michaels.)

But in future-form, a potentially inexpensive, disposable patch that has some of the same sensory capabilities of an armband could be an interesting fitness “gadget”: Slap it on, forget it’s there while you exercise, save the data and throw it out.

(Blast Chiller photo courtesy of Flickr/LGEPR)

MORE CES NEWS:

• Complete coverage
• HP’s Former CTO: Ultrabooks Are Nothing New, webOS Still Has Life Yet
• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
• Microsoft Beefing Up CeBit Presence Even as It Pulls Back on CES
• Inside the CES Lost & Found
• FCC Chairman Has New Tablet, but Same Script: More Spectrum!
• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
• Walt and Katie Take a Tour of CES (Video)
• Schmidt-Storm Alert: The Google Chairman Didn’t Like Your Question
• T-Mobile Expands Bobsled Messaging Service
• Intel Shows Just How It Plans to Get Into Phones (Video)
• Motorola CEO: We’re Going to Release Fewer Phones This Year
• Kinect Helps Keep Aging Xbox at the Top of Its Game
• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
• Grover Is at CES and I Am Missing It
• BlueStacks Bringing Android Apps to Windows 8
• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
• Dynamic Dual Coverage: Ballmer’s Last Act in Vegas and the BCS Championship in 3-D
• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
• LG: 55-Inch Glasses-Free 3-D Screen Is on the Way
• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
• CES 2012: Snooki and Bieber Are In, Gaga Is Out!
• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
• At CES, Expect More Gadgets Telling You to Get Off the Couch
• Intel to Detail Its Phone Plans at CES Next Month
• Microsoft Pulling Out of CES After Upcoming Show
• Intel to Detail Its Phone Plans at CES Next Month
• Dell Will Drop the Flashy Vegas Act for CES This Year
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Here’s an internal memo, titled “Platform for Growth,” just sent out by AOL CEO Tim Armstrong, in which he buries the lede by noting the business partner of content czar Arianna Huffington, Jon Brod, will move to work on its local Patch effort and MapQuest mapping unit full time.

General managers previously reporting to Brod will now report directly to Armstrong. Brod came to AOL from its acquisition of Patch, which Brod ran.

Second, AOL also elevated an exec as Chief Analytics Officer and head of something called Project Management Organization.

And, the company has further simplified its branding structure by moving some of its brands under the Huffington Post Media label, which it had already talked about doing. It’s essentially a streamlining of a previous streamlining.

Here is the email:

From: Tim Armstrong
Date: Tue, 28 Jun 2011 08:29:19 -0400
To: Tim Armstrong
Subject: Platform for Growth

AOLers –

We spent the last week in France at the Cannes Lions Festival, which is a global meeting of the advertising community (the technology industry has CES and Cannes is becoming the “CES” of global advertising). After finishing Investor Day and the global company meeting two weeks ago, the trip to Cannes further underlined the opportunity we are starting to take advantage of — that content and brands are the next wave of the Internet.

Content, Brand Advertising, Video, and Local are going to be at the center of the web and mobile for the next decade and we have made bold moves to position AOL at the forefront of those areas. We have a powerful portfolio of assets as a company and by matching our people, brands, and marketplace-defining products, we will simply get stronger, better and faster.

We are going to further strengthen our content brand portfolio to put maximum leverage into key areas of growth. We are also investing in the leadership structure of the brands and the overall analytical framework we have as a company.

The brand portfolio simplification and investments we are announcing today come from our core strategy, the metrics of growth we see in the business today, and the expanding opportunities we see in the marketplace. Every brand metric was thoroughly reviewed and thoughtfully discussed to get to the list we are sharing with you today. There are a set of brands we will continue to run as stand-alone brands because they have built strong organic traffic, significant customer bases, and unique market positions. There is another set of brands that will gain usage, a larger customer base, and deeper content by becoming part of the Huffington Post platform.

We want to make this transition as simple and intuitive as possible for employees, consumers, and advertisers, so we’ve set up a link to the brand site to review the complete list of brands and USPs.

The AOL Huffington Post Media Group technology platform is the end result of a company wide effort combining the very best content, video, ad, and data technologies from the Blogsmith platform with the best technologies from Huffington Post platform — and we’ve been hard at work adding many new capabilities as well. This combined platform simply has no equal in the digital content space and features an innovative approach to coverage, with edit and tech teams working closely together, and a “hyper-efficient editor” model that enables editors and reporters to rapidly deploy all the tools available to create and disseminate stories. We have integrated in 5min video, AOL demand analytics, and AOL’s data platform deeply into the system, and we will soon be running all of the advertising through AOL’s ad platform. Editors are not silo-ed but empowered to quickly bring their stories to life — and to millions of readers. This leads to engagement on a massive scale, creating an editorial ecosystem with high-quality content, leading edge blogging, commenting, and social sharing capabilities that are easily scale-able and enable real-time speed and a more holistic approach to covering news and engaging audiences.

Here are some quick statistics on the benefits we are seeing in combining sets of brands and platforms:

· When we migrated AOL News to the HuffPost platform we saw significant increases in organic traffic with search entries per UV increasing 195% and social entries per UV up 142%.
· By combining Politics Daily with HuffPost Politics content, social interactions, which include HuffPost comments, FB comments, shares and re-shares, FB Likes, tweets, re-tweets, and email shares reached 3.3MM.

· Adopting Huffington Post style blogging in the Patch platform allowed us to sign up 5,000 bloggers in 2 weeks.

The goals of the brand and platform investments are the following:

1. Grow traffic and grow revenue with high quality experiences for consumers and advertisers
2. Be the leader in content CMS and CMS for Ads (Devil + Social)
3. Simplify the business process and increase profitability in each vertical area
4. Scale video and International
5. Create a culture of speed and transparency on all fronts

In support of the brand investments, we are also making people investments. The current GM structure around the content brands will report to me and I have met with all the GM’s to discuss each vertical opportunity. Local will be broken out as a vertical and is a space where AOL is in a leadership position. Jon Brod will focus full-time on AOL’s local efforts, including Patch and Mapquest. Jon is the co-founder of Patch and has spent the past few months successfully integrating the Huffington Post and AOL media. AOL local has a lot of exciting products coming out this summer and we will be connecting many of those products to our larger business.

We are also announcing a new position that will have a positive impact across AOL — the formation of a Chief Analytics Officer and Project Management Organization (PMO). Tim Lemmon, currently working in Ned Brody’s Advertising.com Group, is being promoted to CAO, reporting directly to me, and will oversee and drive analytics and project management on a company-wide basis. Data and analytics are key to our success and we will continue to look for Tim to provide fact-based guidance and executional focus for all of AOL. Tim’s current AOL Analytics team including Pricing and Yield Management will continue to report to him.

I’ll be holding a working meeting today at 11am EDT with the Sales team to discuss the new brand structure, the HuffPost platform, and the supporting org structure. The meeting information is available on AOL Today and anyone is invited to dial in if you are interested in learning more. Go AOL! -TA

Talking to AOL CEO Tim Armstrong earlier this week about its investors day tomorrow, he used the word “execution” a lot.

No, not the kind evoking a firing squad if he did not succeed at turning around the New York-based Internet giant soon as he has long promised.

Instead, Armstrong was referring to reassuring big shareholders and Wall Street analysts that AOL was now in a mode of making sure all its many moves to turn around the company will finally begin to pay off.

“Basically, our point is going to be about fully operating around the strategy we’ve built,” said Armstrong in a wide-ranging interview. “It seems right for investors to ask about executing on what we have been doing for the last year and a half.”

It’s certainly the right message for the charismatic executive to be delivering, as he and other top AOL execs present their plans moving forward, especially after what has turned out to be a very hyperactive year.

After deep layoffs, a massive rejiggering of its management ranks and a number of shifts of its business focus, without much advertising increase to show for it yet, Armstrong has also pushed through a series of acquisitions.

It culminated in the high-profile and decidedly dramatic purchase of the Huffington Post in January for $350 million in cash.

Now, said Armstrong, deals will be taking a back seat to products.

“We are diligently staying on strategy and really focusing on products and services,” said Armstrong. “We have laid out the path we are on and now investors want proof of the concept.”

To Armstrong, that means the push of “branded content” and a continued focus on significant properties in key topic areas.

Tomorrow, in news that could worry investors, AOL will be noting that traffic is flat year over year, but explaining that it is due to the outsourcing of its sports and health sites.

“If you added that back in, we would have had a phenomenal year of growth,” said Armstrong. “Our main point will be that this is the right path for AOL.”

In fact, in an unusual wording, he said AOL was betting on the “urbanization” of the Web around big branded sites, which is, in many ways, exactly where the Web was a decade ago with Yahoo, Excite and others.

But Armstrong will be making the point that this retro idea is perfect for today, as marketers look for quality content that attracts big audiences, which has seen its most energetic application in the Huffington Post.

Thus, his linchpin remains the flashy news site’s even flashier co-founder Arianna Huffington, who has cut a very wide swath through AOL’s content efforts since Amstrong made her media czar of the company.

As Armstrong did, she also stressed the focus on unique visitors and ad growth, more video and a laser focus on local.

This includes shoving editorial into every AOL property, including unlikely ones such as Moviefone and MapQuest, and integrating it all to point back to the Huffington Post mothership.

“Much better editorial integration is a centerpiece of what we are doing, surfacing content in new places it was not before,” said Huffington, who used examples of local stories via its Patch unit that have gone global with a special push.

And by global, that also means the creation of new content sites in Europe and elsewhere, in order to build this unusual dream of a fully aggregating world.

“It is a big test of the HuffPo platform aggregation to do this,” said Huffington, who has clearly longed for the kind of money and staff to do this for a very long time. “It has moved a lot faster than I thought it would … but it feels good to be moving on so many fronts at once.”

Many fronts indeed, which might make investors pause. So far, those shareholders have had a continued wait-and-see attitude toward AOL, which has seen its stock decline almost 13 percent from its late 2009 IPO debut.

That’s mostly due to worries about whether the continued and expected fall-off of its lucrative access business can be met by similar increases in its ad business.

That share drop has been especially steep since the beginning of the year, but it has also not been drastic, indicating an interest in continuing to believe Armstrong’s confident — well, confidently delivered, at least — narrative.

As Citi’s Mark Mahaney wrote in a one-hand-other-hand note yesterday about the investor day:

Positives: 1) AOL still remains a top 5 U.S. Internet property; 2) In the latest quarter, AOL’s Display segment grew Y/Y for the first time in ~3 years, and this improvement seems sustainable; 3) At 4x ’11 EV/EBITDA, AOL’s valuation is among the lowest of any ’Net Stock. Negatives: 1) Deteriorating fundamentals; 2) Significant market share losses — ’Net usage, Display Advertising revenue & Search queries; 3) A significant profit hole from the structural decline of its Subs biz; 4) Substantial competitive risk; and 5) An unproven (@ AOL) management team.

“We all like Tim and what he says makes a lot of sense,” added one big investor, who is also attending and has many questions about the efficacy of what AOL is doing, in a common sentiment among its large shareholders. “But we also need to see real results soon.”

Now its co-founder, Arianna Huffington, is plunging into a campaign to rescue AOL Inc.. As the new editor in chief of AOL’s 56 content sites, a job she began after AOL’s $315 million acquisition of the Huffington Post closed last month, Ms. Huffington is installing her employees, pushing coverage of her pet topics and gutting aspects of AOL’s existing system to do so.
“There was no clear editorial direction,” she said of AOL’s collection of sites, settling into her new office in New York recently. “That’s what we’re bringing to the table now.”

Whether the moves will be enough to transform the struggling Internet icon–and turn significant profits–remain to be seen. AOL has struggled in its years’-long quest to generate a big business off inexpensive digital content. The company says it aiming to make its content business, minus its Patch blog network, profitable this year.

Read the rest of this post on the original site

The culmination of the deal–which has already been approved by regulators–is set to be announced by the New York-based company this morning, only one month after it was struck.

And–in a clear sign of the shift in its focus toward a more editorially driven direction under the now-official content head Arianna Huffington (pictured here)–sources said the closing will be accompanied by the announcement of the hiring of a half-dozen journalists to AOL’s new Huffington Post Media Group unit.

Among the new reporters are some more high-profile grabs from other media giants, including The Daily’s Jon Ward. He has been the Washington bureau chief for New Corp.’s high-profile online newspaper, which only recently launched.

Also set to join AOL is Yahoo’s senior media writer Michael Calderone.

Interestingly, along with more experienced editorial staff, sources said the announcement will also include new hires via the Huffington Post’s Jefferson Program for Young Journalists.

Sources said the new hires are only the beginning of a series of them, as the impact of the leadership of Huffington becomes clearer.

Along with the news and opinion site, the well-known media personality is now in charge of all of AOL’s varied content properties, including its locally aimed Patch.

Huffington, with obviously strong support from AOL CEO Tim Armstrong, has been talking a lot in a plethora of interviews since the deal was announced a few weeks ago about the importance of creating a new media organization focused on original reporting.

In a way, AOL is now competing with big news sites such as those on Yahoo, as well as smaller niche content and also mainstream entities.

Even before the deal was struck with AOL, the Huffington Post had been heading down that path of pulling in mainstream journalists. Last year, it hired former New York Times economics writer Peter Goodman and former Newsweek columnist Howard Fineman, among others.

The formula? Adding the strong journalism reputation of these reporters to the eclectic mix of socializing, blogging, celebritizing and aggressive aggregating that the site has used to garner huge amounts of traffic in recent years.

As I had previously written, the AOL Way–the same for a strategy document about content on the site–is now the Arianna Way.

Here are Huffington and Armstrong talking about such issues in in an exclusive video interview BoomTown did with them just before they announced the deal on Super Bowl Sunday about a month ago:

]]> http://allthingsd.com/20110307/aol-deal-closes-today-as-more-high-profile-huffington-post-journalism-hires-signal-new-direction/feed/ 1 http://allthingsd.com/20110304/aol-buys-local-aggregator-outside-in/ http://allthingsd.com/20110304/aol-buys-local-aggregator-outside-in/#comments Fri, 04 Mar 2011 15:11:19 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=30419 AOL has purchased Outside.In, one of many startups that’s tried to figure out how to make local and “hyper-local” news work. The New York-based startup didn’t seem to crack the code either, but at least you can see why AOL might be interested in its team or technology, given Tim Armstrong’s focus on local with his Patch program. Business Insider first reported the transaction.

]]> http://allthingsd.com/20110304/aol-buys-local-aggregator-outside-in/feed/ 0 http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/ http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/#comments Mon, 07 Feb 2011 13:55:58 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=29429 Tim Armstrong and company spent yesterday explaining their $315 million Huffington Post purchase to the press. Now they’re doing the same for Wall Street, via a conference call.

AOL CFO Artie Minson prepped investors for the call with a memo laying out expectations. Short version: AOL thinks HuffPo will earn about $10 million on revenue of $50 million this year (as long as you’re okay with using “adjusted OIBDA” as a proxy for “profit”). It also thinks the purchase will save it $20 million a year, but it’s going to spend around $20 million on restructuring charges when the deal goes through.

I’ll liveblog the call below:

8:02 am: Greetings! About to start now.

8:03 am: On the call: Tim Armstrong, Arianna Huffington, Artie Minson.

8:03 am: Armstrong makes a Super Bowl joke that I can’t quite follow, and I like football. But now praising Arianna, co-founder Kenny Lerer and outgoing AOL CEO Eric Hippeau.

“The Huffington Post is one of the best properties on the Internet.” Armstrong, Huffington and Minson are all BlackBerry users.

8:06 am: On revenue: This gives an opportunity to serve more brand marketers, who are “very interested” in the scale this gives us.

8:07 am: Spending next 30 days on integration. “Really synergies to be had.”

Next steps: Next 72 hours communicating with employees, talking to partners. 1,500 AOL workers on the phone this morning explaining deal to others.

“This may be the smallest disruption” internally of any deal I’ve worked on. Majority of integration done within 35 to 40 days.

8:09 am: We’ve looked at a bunch of companies, though we’re mainly going to concentrate on organic growth. But Arianna is great [many superlatives] and she “also happens to be a woman.”

8:10 am: Here’s Arianna.

8:11 am: “Amazing” how aligned two orgs are.

8:11 am: HuffPo was profitable last year. We were thinking about bringing in additional investors last year, and an IPO down the line. But this made perfect sense.

8:12 am: This deal provides a “dramatic acceleration” for the plans we already had.

8:13 am: Some praise for Patch, AOL’s local strategy.

8:14 am: Can’t wait to start!

8:14 am: Alrighty, then. Here’s Artie Minson with some nuts and bolts.

Actually, it’s some color on the deal. But a lot of it is in the prepared remarks he put out earlier this morning.

8:15 am: Again, $20 million in cost savings here. And again, we’ll have to pay up for restructuring: $20 million for cuts, and $10 million for purchase price.

8:17 am: Still basically reading from prepared remarks. Some bookkeeping talk re: compensation accounting.

8:18 am: Remember, display ad growth coming will finally start showing up second half of this year.

8:19 am: Q&A:

Q: Talk about content strategy. Does HuffPo become hub for content going forward? Does it replace Seed? And how long is Arianna’s contract?

A: “The press” has been talking about our content strategy, so let me be clear–we’re focusing on premium content. Things like Seed and StudioNow are platforms–you can do whatever you want with them, different quality levels, at different types of scale.

And then the other thing that is important about those platforms is the ability they give us to work with advertisers.

One of our main interests in HuffPo is their technology and publishing system. So now we have multiple systems [which he is saying is a good thing]. “Our content strategy hasn’t changed.” The “stuff that was out in the press about the AOL Way” was just one way of doing things. [This is not very convincing]

Arianna, tell us how long you’re going to stay.

8:24 am: Arianna: “I’ve told Tim I want to stay here forever. I want this to be the last act of my life.” Anything I want to do I can do here.

[Sorry, missed next part but it was a defense/explanation of content strategy.]

8:26 am: Armstrong: Arianna has a multiyear contract, but it’s open-ended.

8:27 am: Arianna: By the way, we’re going to bring back commenting to AOL stories, and socialize them.

8:28 am: Q: Why buy instead of partnering? Were there other bidders? Also, how will HuffPo politics affect AOL?

8:28 am: Armstrong: We do partnerships where there is “limited upside to those arrangements” so ” we can really spend time on the areas we want to win”–i.e., we don’t care about sports, we do care about women.

“Arianna is somebody we’d rather have inside our building than outside our building.”

“If there were or weren’t bidders on the other side,” I think we got the right price.

8:30 am: Arianna. “As we’ve said, again and again, Huffington Post was not for sale….Nobody was in a hurry to cash out, everybody believed that we could do an IPO down the road.” It’s just that Tim gave us a great offer. [hrrrm.]

On politics–we used to be all about politics, now we’re not. Just 15 percent of our traffic. We have a divorce section now.

Talking up AOL’s “college” section.

8:33 am: Q: For Arianna: More on Patch, please. What do think about what AOL’s done with it, and what you can do with it?

8:33 am: [Every time Arianna says "local level" I think she's saying "locker level." It's happened at least twice, maybe more, on this call.]

There’s a “greatest person of the day” feature we have, and I think Patch should use that. [Or maybe vice-versa, sorry.] I also like their five percent “giving back” rule, cause marketing, etc.

8:35 am: Armstrong: Again, we can do national and local. That’s important. NFL rights are important, and so are local news stories.

8:36 am: Q: Who’s going to sell what? And can you talk about pricing disparity between AOL and HuffPo?

8:37 am: Armstrong: “We would like to maintain all the people from both sales forces [except for Greg Coleman!]. I think we will end up with a large-scale, large-property organization–I don’t know exactly what that’s going to look like, though.

On sell-through rate: Slightly lower at HuffPo, because they’ve been ramping up traffic, and sales force. On CPM, same story. So we can bring up sell-through rate and CPM, and have a larger sales force. [This is pretty much the best argument for the deal that Armstrong can make.]

[BTW: Good back-channel discussion on Twitter right now about AOL's SEO skills, and the people behind it. None of that coming up during this call right now.]

[Sorry, I meant HuffPo's SEO skills, much of which stem from blueprint BuzzFeed CEO Jonah Peretti set out.]

Q: Why not use equity for this deal?

A: Because our equity is priced too low, essentially. But HuffPo employees did roll over 25 percent of deal consideration into AOL options. So as that equity gets more valuable, they’ll get upside.

8:45 am: Q: In your statement, you talked about OIBDA growth in 2013. More on that please.

Minson–probably going to stick to my prepared remarks on that one.

8:46 am: Last Q: Your acqusitions have been about toolsets or content. As you think about others going forward, what else do you want?

Armstrong: We have long-term vision. On plumbing: We’ve wanted to get platforms and plumbing straightened out, and we’re doing that now. Think about the bones or foundation of a very large property. That’s why we’ve been doing infrastructure, like with video–5Min and GoViral and StudioNow.

Going forward, we’ll be doing infrastructure. And we’ll continue to look at “media properties and media brands” that fit our strategy. [Remember, Web site owners: HuffPo just got 10x revenue.

8:50 am: Minson: But we're very price sensitive and we've walked away from deals.

8:50 am: Arianna: And we like women!

8:51 am: Armstrong sums up: Success "in the Internet space" requires vision and execution. That's this deal. And remember, content and brands become more valuable as tech gets faster, more advanced. And "expect us to stay on strategy and on point" going forward. "We're going to overcommunicate" with both sets of employees as we integrate. [You've been warned!]

And we’re done. Thanks for reading.

[Photo credit: Arianna Huffington]

]]> http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/feed/ 5 http://allthingsd.com/20100921/twitter-explains-this-mornings-glitch/ http://allthingsd.com/20100921/twitter-explains-this-mornings-glitch/#comments Tue, 21 Sep 2010 19:48:14 +0000 Beth Callaghan http://voices.allthingsd.com/?p=30113 Twitter has posted an official explanation of the “onMouseOver” security flaw that hit users of the Web site this morning and has since been resolved: “The security exploit that caused problems this morning Pacific time was caused by cross-site scripting (XSS)…In this case, users submitted javascript code as plain text into a Tweet that could be executed in the browser of another user.” Security team member Bob Lord said that the issue had been discovered and patched last month, but a recent site update resurfaced it.

]]> http://allthingsd.com/20100921/twitter-explains-this-mornings-glitch/feed/ 0 http://allthingsd.com/20100826/a-patch-of-its-own-yahoo-builds-a-san-francisco-newspaper/ http://allthingsd.com/20100826/a-patch-of-its-own-yahoo-builds-a-san-francisco-newspaper/#comments Thu, 26 Aug 2010 20:37:57 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=22899 Patch, AOL’s network of Web-only local newspapers, is open in 100 towns. And AOL (AOL) says it will have 500 by the end of the year. Now it looks like Yahoo is planning its own local Webpaper venture, in San Francisco.

Yahoo will use its Associated Content content farm/factory/mill (pick your favorite phrase!), acquired earlier this year for $90 million, to build out the site. Alan Mutter, the plugged-in newspaper blogger, has the details:

In a breathless email blast to registered contributors at Associated Content, Yahoo said it is “looking for writers living in or near the San Francisco area (like you!) to write compelling, local content–ranging from highlights of your favorite neighborhood destinations to metro-wide, first-person reporting assignments covering the stories and topics not typically found in mainstream news media.”

A questionnaire soliciting personal interests and writing samples from potential contributors indicates that the site will cover crime, local news, politics, weather, traffic, transit, sports, business, local celebrities, personal-interest stories, events and things to do, nightlife, restaurants, social calendar, real estate and development, education.

Those responding to the questionnaire were promised “a $10 assignment to write on any topic about San Francisco!” In the future, Yahoo said “select contributors” will receive “weekly, paid assignments to write articles on SF and their own neighborhoods.”

I’ve asked Yahoo (YHOO) for comment on the venture, but I’ve heard nothing but chirping crickets in response. (UPDATE: See new Yahoo comment below.) Which is too bad, because I had some questions for Carol Bartz and company. For instance:

• Is this a one-off, or should we expect to see more AC-powered local sites?
• If we’re going to see more of these, what should the local newspapers that Yahoo does business with think?
• Or are we looking at this the wrong way? For instance, maybe this really isn’t a foray into local news, but a high-profile demonstration project for Associated Content? Is that plausible?
• Well, how did I get here?

Okay, okay. I know the answer to that last one. If I hear back from the Yahoos, I’ll update. Until, then, enjoy:

UPDATE: Just after I hit “publish,” this statement from Yahoo popped up in my in-box:

Associated Content is an important platform for generating content across Yahoo!’s content verticals, and local is one of many areas on Yahoo! that will benefit from our ability to generate high quality content on specific topics. We are moving quickly to integrate Associated Content into Yahoo!’s media properties and explore new ways to leverage the contributor community, including local.

Meanwhile, PaidContent’s Joe Tartakoff puts Yahoo’s Bay Area efforts in the context of its larger local ambitions. A good read.

]]> http://allthingsd.com/20100826/a-patch-of-its-own-yahoo-builds-a-san-francisco-newspaper/feed/ 2 http://allthingsd.com/20100816/area-man-runs-web-newspaper-aol-promises-500-patches-by-the-end-of-2010/ http://allthingsd.com/20100816/area-man-runs-web-newspaper-aol-promises-500-patches-by-the-end-of-2010/#comments Tue, 17 Aug 2010 04:01:36 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=22805 Every big Web publisher, and lots of small ones, too, have tried to figure out how to crack the market for local Web ads. No one’s figured it out yet.

But AOL feels good enough about Patch, its take on local, to boast about its performance. Tim Armstrong’s company is announcing that it has opened up 100 Patch outposts–digital versions of community newspapers, each staffed by a sole full-time editor and aided by a group of freelancers.

That’s up from 44 at the end of the first quarter, and the company plans to have 500 up and running by the end of the year. And that allows AOL to boast that it is hiring more journalists than anyone else on the planet this year.

Cool!

But AOL (AOL) had already announced internally that it would build “hundreds” of Patch outposts this year. And it has already told shareholders that it would spend up to $50 million expanding Patch in 2010. (Armstrong invested in the company when he was still running sales at Google (GOOG), then snapped it up after taking the reins at AOL last year).

So there’s not a lot of real news here. And given that AOL won’t offer specific performance metrics–traffic, ad sales, etc.–about Patch, it’s hard to assess how it’s really doing.

Still, for the record, AOL says Patch is doing great–and not to worry about gripes that its journalists are working very long hours for not much pay.

Noted! Here’s my chat with Patch Media president Warren Webster, who founded the company in 2007. What’s with the creepy critter perched above his shoulder? No idea.

]]> http://allthingsd.com/20100816/area-man-runs-web-newspaper-aol-promises-500-patches-by-the-end-of-2010/feed/ 0 http://allthingsd.com/20091217/taxihack-lets-new-yorkers-rate-their-ride/ http://allthingsd.com/20091217/taxihack-lets-new-yorkers-rate-their-ride/#comments Thu, 17 Dec 2009 18:59:12 +0000 Marisa Taylor http://voices.allthingsd.com/?p=19275 New Yorkers know they can dial 311 for help with most municipal problems, but what do you about a bad taxi ride?

Randy Meech has created a site called TaxiHack that lets unhappy passengers post their cab comments, via email or tweet, in real time. A director of engineering at Patch, an AOL (AOL)-owned local news site, Mr. Meech said that he was interested in creating a dialogue about taxi rides in the vein of Twitter.

“I was hoping it would be a fun conversational thing and not just for complaints, but the complaint aspect is definitely there,” he said.

There’s no legal or criminal consequence for any of the drivers or cab companies cited on TaxiHack, but Mr. Meech said he imagined it would be in their best interests to pay attention to the comments.

Read the rest of this post on the original site

]]> http://allthingsd.com/20091217/taxihack-lets-new-yorkers-rate-their-ride/feed/ 0 http://allthingsd.com/20091209/live-from-new-york-tim-armstrong-makes-one-last-pitch-for-aol/ http://allthingsd.com/20091209/live-from-new-york-tim-armstrong-makes-one-last-pitch-for-aol/#comments Wed, 09 Dec 2009 18:15:56 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13757 AOL is about to cut ties to Time Warner (TWX), and CEO Tim Armstrong has been making his case to current and potential investors. Here’s one last pitch, delivered to the crowd at the annual UBS (UBS AG) Media and Communications Conference in New York.

Note to readers and/or Engadget editors: This liveblog is not an official transcript. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one. Cool? Cool.

Q: Why leave Google, which is awesome, for AOL, which is not?

A: The Internet is still at an early stage. AOL is a global brand, and that’s hard to build. We have a unique set of assets. AOL can be core and central to where the next $50, $100 billion are going. And we have unique talent to make a run at it.

Q: Please explain your strategy.

A: “Content, ads and communication.”

Q: Why is this turnaround different than other AOL turnarounds?

A: I can tell you whatever, but you need to see metrics move to believe me. But we have a good strategy. “You have to maniacal about the piping,” and in the past AOL wasn’t. We had terrible integration of acquisitions, systems. You want to be able to take $25, $40 million ad deals and run them through the piping and we haven’t been able to do that.

Q: Please explain AOL’s content strategy.

A: We launched our content platform last night. A single platform. It uses data, helps scale to content producers and will work with thousands of partners. It differs from Demand Media et al in that we already have scale for production and scale for advertising. We can snap those two platforms together. [Note: No mention of robots yet.]

Q: Is AOL interested in video or other self-produced stuff?

A: Sure. Video’s important to us. We’re also interested in what we would call “niche at scale.” As a collective whole, we have 70 or 80 properties and will go up to 100. We want to aggregate uniques that will be attractive to advertisers. We want to own the equivalent of the top 80 or 90 cable channels on the Internet. We’re also very interested in local, via Patch [which Armstrong invested in before AOL bought it].

Q: How do you market all this content?

A: By the way, everyone thinks our traffic comes from the access business. That’s not true. It’s a minority of our traffic. Also, when you produce your own content, you can distribute it and get traffic back. You also need to make this stuff shareable on the Web. We’re getting mass scale distribution from platforms like Twitter and, of course, search.

Q: There’s a big gap between your monetization and Yahoo’s (YHOO). How do you change that?

A: I can’t tell you! It’s how I got my job. Ho ho ho. Okay: AOL went to a network-based strategy a couple of years ago, which cut into the pricing yield, and that is now changing. We addressed this in the summer and fall. Also, AOL, shockingly, had under 1,000 customers on ad platforms when I showed up–700, actually. At Google (GOOG), we had millions. So we had a clear dialogue about what had happened. Also, the salesforce needed to be restructured, different tiers of the salesforce. And we also needed a self-service option you can use with a credit card. “Look, this is why they hired me….If we can’t make that business work, I think we have big issues.”

Q: What’s up with search?

A: We like Google and are still talking to them. We’re also talking to “other partners.” Last time, the deal was done “purely for money,” and that had benefits and some downside. This time, the pricing may be different, but it’s not the only thing that determines value.

Q: Please be more specific.

A: Okay. We’re really big on music. But if you go to AOL search for music, you get a subpar version of Google’s search for music. There are too many ads on the page. So why don’t we set up a onebox-like search box and send people to AOL music? For example, let’s think about trading search dollars for display dollars. We want to make money on ads in a much more natural and healthy way.

Q: What about investments in content?

A: Sure. We’re making nominal investments in content and a putting a lot of money in technology and infrastructure. In terms of M&A, we will sell off stuff that doesn’t make sense and do tuck-in buys.

Q: How does your local strategy differ from others?

A: We do real local, not quasi-local. We put editors in communities to actually get the stuff and monitor and update platforms. “It’s a risk, it’s a bet,” but early results are promising.

Q: Your ad business is much less profitable than that of your peers. What up?

A: Our hamburger stand says “really cheap burgers at really cheap prices,” but we’re actually serving sea bass, and we should be charging for that. We told customers, via Platform A, etc., that they could buy us really cheap. Also, cost structure: We’re taking out a third of the business. Access was making money, and things “kind of got loose” at the rest of company. But advertising can be nicely profitable with content and we can do that.

Q: Okay, but when do ad biz profits become self-sustaining?

A: Not in 2010, but sooner than five years. I own two percent of the company, and I want it to work. Morale is already better than when I got here.

Q: Are you removing all premium inventory from Ad.com?

A: Don’t believe what you read! Internet! Bad! An analyst said we might do it. What we’re going to do is “sell Superbowl product at Superbowl pricing.” [i.e., a nonanswer]

Q: What’s up with the access business and the traffic it generates?

A: We have 100 million users. Five million people get “paid services” from us. Half of those are dial-up users. But people think that 70, 80, 90 percent of traffic comes from access. That’s not the case.

Q: What’s up with mobile?

A: We want to increase consumer mobile traffic. We have lots of Apple Store downloads. We’ll do more consumer downloads/traffic. And we’ll build our mobile ad business after that, probably in 2011.

Q: What do Federal broadband access plans mean for your business?

A: All of us believe that there will be some “tail” of dial-up access for some time. But it’s not going away, and the decline is actually moderating [which makes sense--if you're still on dial-up now, what are you waiting for?]

Q: Please reiterate profitability plans for display/content/ads.

A: In reality, we’re “marginally” profitable now, but that’s not good enough.

Q: If you reprice ad business profitability, what does that mean for you?

A: I don’t want to set goals, but we’re not off by single digits. It’s significant.

Q: Talk about your communications business, please.

A: We have AIM, ICQ, email–all big opportunities. We need to clean up current products and services. Communications products “were recipient of problems” in the past. AOL tried to jam Bebo and AIM together, which didn’t work. We also slammed our stuff with way too many emails. I tried AOL email when I started and got 15 to 20 ads. Not a great user experience. It’s “project hygiene.” We also believe people want a unified platform across devices and we’re working on that.

Q: Talk about compensation.

A: I had the money options at Google, which got moved into AOL options at market value. Plus salary blah blah. I didn’t take a bonus this year “because I don’t think I should have gotten paid for laying off a third of our employees.” [All of this is discussed in the proxy, no?]

Q: Here’s a softball about your management team. How awesome is it?

A: Totally awesome. We’ll add more over time. On the engineering side, I was surprised that we weren’t chasing good engineers when we got here. “We have spent a lot of time and energy on the subject matter.” Culturally, our “internal mojo turned around,” and now the engineering community gets that we “have a big-hair problem” but that we have tons of use so things they do here have a big impact.

Q: Brand strategy: How do you extract brands people don’t know about while promoting the main site and vice versa?

A: We think about this like Disney (DIS), I think. By the way, there are two brands. The financial media brand is battered–worst merger in history, etc. But consumers like the AOL brand. Tomorrow, we’re giving AOL users a a 50 percent promotion via Target (TGT) on “very good toys.” So in the Disney way, there’s the brand people like, and we have other brands people like, just as Disney has ESPN. So we’ll have non-AOL brands launching, and we’ll refurbish the AOL brand itself.

Q: Whither MapQuest?

A: MapQuest is still Top 20 search term. It has a large market share. The technology has not been focused on in a number of years. We’re changing that. Partners are inquiring about MapQuest, and I think what we’ll do is an operational partnership with them. We feel like its a “very, very valuable property.”

Q: What are best metrics to evaluate AOL’s turnaround/growth?

A: Unique visitors [which is what everyone says now]. We need a turnaround in domestic display, which you should see in 2010. And then we need to generate cash, because that’s what healthy companies do. In terms of that cash: No more “hail Marys” where we take cash from access and make big bets on things that we don’t know about [i.e., Bebo]. We will want to fund the Web services business with cash from the Web services business.

]]> http://allthingsd.com/20091209/live-from-new-york-tim-armstrong-makes-one-last-pitch-for-aol/feed/ 0 http://allthingsd.com/20091112/fwix-unveils-revenue-sharing-plan-for-hyperlocal-bloggers/ http://allthingsd.com/20091112/fwix-unveils-revenue-sharing-plan-for-hyperlocal-bloggers/#comments Thu, 12 Nov 2009 15:47:27 +0000 Shira Ovide http://voices.allthingsd.com/?p=17811 An online news start-up is going where Google (GOOG) and other giants haven’t: sharing revenue with the people who write the news.

Fwix, a one-year-old start-up backed by BlueRun Ventures, is one of a growing number of portals for “hyperlocal” news, a buzzword that refers to sites about schools, culture, gossip and other information on a neighborhood level. Other hyperlocal aggregators include Outside.In and EveryBlock. Some, like Patch, have their own staff, while others, like Fwix, mostly organize news written by bloggers and community members.

Now Fwix is launching a new advertising product, AdWire, and agreeing to split revenue with the people who write the local information, laying down the gauntlet against big news aggregators from Google on down.

Read the rest of this post on the original site

]]> http://allthingsd.com/20091112/fwix-unveils-revenue-sharing-plan-for-hyperlocal-bloggers/feed/ 0 http://allthingsd.com/20091007/a-windows-to-help-you-forget/ http://allthingsd.com/20091007/a-windows-to-help-you-forget/#comments Thu, 08 Oct 2009 01:02:03 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20091007/a-windows-to-help-you-forget/ In just two weeks, on Oct. 22, Microsoft’s long operating-system nightmare will be over. The company will release Windows 7, a faster and much better operating system than the little-loved Windows Vista, which did a lot to harm both the company’s reputation, and the productivity and blood pressure of its users. PC makers will rush to flood physical and online stores with new computers pre-loaded with Windows 7, and to offer the software to Vista owners who wish to upgrade.

With Windows 7, PC users will at last have a strong, modern successor to the sturdy and familiar, but aged, Windows XP, which is still the most popular version of Windows, despite having come out in 2001. In the high-tech world, an eight-year-old operating system is the equivalent of a 20-year-old car. While XP works well for many people, it is relatively weak in areas such as security, networking and other features more important today than when XP was designed around 1999.

After using pre-release versions of Windows 7 for nine months, and intensively testing the final version for the past month on many different machines, I believe it is the best version of Windows Microsoft (MSFT) has produced. It’s a boost to productivity and a pleasure to use. Despite a few drawbacks, I can heartily recommend Windows 7 to mainstream consumers.

Like the new Snow Leopard operating system released in August by Microsoft’s archrival, Apple (AAPL), Windows 7 is much more of an evolutionary than a revolutionary product. Its main goal was to fix the flaws in Vista and to finally give Microsoft customers a reason to move up from XP. But Windows 7 is packed with features and tweaks that make using your computer an easier and more satisfying experience.

The new taskbar shows small previews of many windows and allows for larger previews.

Windows 7 introduces real advances in organizing your programs and files, arranging your taskbar and desktop, and quickly viewing and launching the page or document you want, when you want it. It also has cool built-in touch-screen features.

It removes a lot of clutter. And it mostly banishes Vista’s main flaws—sluggishness; incompatibility with third-party software and hardware; heavy hardware requirements; and constant, annoying security warnings.

I tested Windows 7 on 11 different computers, ranging from tiny netbooks to standard laptops to a couple of big desktops. These included machines from Lenovo, Hewlett-Packard (HPQ), Dell (DELL), Acer, Asus, Toshiba and Sony (SNE). I even successfully ran it on an Apple Macintosh laptop. On some of these machines, Windows 7 was pre-loaded. On others, I had to upgrade from an earlier version of Windows.

In most cases, the installation took 45 minutes or less, and the new operating system worked snappily and well. But, I did encounter some drawbacks and problems. On a couple of these machines, glacial start-up and reboot times reminded me of Vista. And, on a couple of others, after upgrading, key features like the display or touchpad didn’t work properly. Also, Windows 7 still requires add-on security software that has to be frequently updated. It’s tedious and painful to upgrade an existing computer from XP to 7, and the variety of editions in which Windows 7 is offered is confusing.

Finally, Microsoft has stripped Windows 7 of familiar built-in applications, such as email, photo organizing, address book, calendar and video-editing programs. These can be downloaded free of charge, but they no longer come with the operating system, though some PC makers may choose to pre-load them.

In recent years, I, like many other reviewers, have argued that Apple’s Mac OS X operating system is much better than Windows. That’s no longer true. I still give the Mac OS a slight edge because it has a much easier and cheaper upgrade path; more built-in software programs; and far less vulnerability to viruses and other malicious software, which are overwhelmingly built to run on Windows.

Now, however, it’s much more of a toss-up between the two rivals. Windows 7 beats the Mac OS in some areas, such as better previews and navigation right from the taskbar, easier organization of open windows on the desktop and touch-screen capabilities. So Apple will have to scramble now that the gift of a flawed Vista has been replaced with a reliable, elegant version of Windows.

Here are some of the key features of Windows 7.

New Taskbar: In Windows 7, the familiar taskbar has been reinvented and made taller. Instead of mainly being a place where icons of open windows temporarily appear, it now is a place where you can permanently “pin” the icons of frequently used programs anywhere along its length, and in any arrangement you choose. This is a concept borrowed from Apple’s similar feature, the Dock. But Windows 7 takes the concept further.

For each running program, hovering over its taskbar icon pops up a small preview screen showing a mini-view of that program. This preview idea was in Vista. But, in Windows 7, it has been expanded in several ways. Now, every open window in that program is included separately in the preview. If you mouse over a window in the preview screen, it appears at full size on your desktop and all other windows on the desktop become transparent—part of a feature called Aero Peek. Click on the window and it comes up, ready for use. You can even close windows from these previews, or play media in them.

I found this feature more natural and versatile than a similar feature in Snow Leopard called Dock Expose.

You can also use Aero Peek at any time to see your empty desktop, with open windows reduced to virtual panes of glass. To do this, you just hover over a small rectangle at the right edge of the taskbar.

Taskbar icons also provide Jump Lists—pop-up menus listing frequent actions or recent files used.

Desktop organization: A feature called Snap allows you to expand windows to full-screen size by just dragging them to the top of the screen, or to half-screen size by dragging them to the left or right edges of the screen. Another called Shake allows you to make all other windows but the one you’re working on disappear by simply grabbing its title bar with the mouse and shaking it several times.

File organization: In Windows Explorer, the left-hand column now includes a feature called Libraries. Each library—Documents, Music, Pictures and Videos—consolidates all files of those types regardless of which folder, or even which hard disk, they live in.

Networking: Windows 7 still isn’t quite as natural at networking as I find the Mac to be, but it’s better than Vista. For instance, now you can see all available wireless networks by just clicking on an icon in the taskbar. A new feature called HomeGroups is supposed to let you share files more easily among Windows 7 PCs on your home network. In my tests, it worked, but not consistently, and it required typing in long, arcane passwords.

Touch: Some of the same kinds of multitouch gestures made popular on the iPhone are now built into Windows 7. But these features won’t likely become popular for a while because to get the most out of them, a computer needs a special type of touch screen that goes beyond most of the ones existing now. I tested this on one such laptop, a Lenovo, and was able to move windows around, to resize and flip through photos, and more.

Speed: In my tests, on every machine, Windows 7 ran swiftly and with far fewer of the delays typical in running Vista. All the laptops I tested resumed from sleep quickly and properly, unlike in Vista. Start-up and restart times were also improved. I chose six Windows 7 laptops from different makers to compare with a new MacBook Pro laptop. The Mac still started and restarted faster than most of the Windows 7 PCs. But the speed gap has narrowed considerably, and one of the Lenovos beat the Mac in restart time.

Nagging: In the name of security, Vista put up nagging warnings about a wide variety of tasks, driving people crazy. In Windows 7, you can now set this system so it nags you only when things are happening that you consider really worth the nag. Also, Microsoft has consolidated most of the alerts from the lower-right system tray into one icon, and they seemed less frequent.

Compatibility: I tried a wide variety of third-party software and all worked fine on every Windows 7 machine. These included Mozilla Firefox; Adobe (ADBE) Reader; Google’s (GOOG) Picasa and Chrome; and Apple’s iTunes and Safari.

I also tested several hardware devices, and, unlike Vista, Windows 7 handled all but one smoothly. These included a networked H-P printer, a Canon (CAJ) camera, an iPod nano, and at least five external flash drives and hard disks. The one failure was a Verizon (VZ) USB cellular modem. Microsoft says you don’t need external software to run these, but I found it was necessary, and even then had to use a trick I found on the Web to get it to work.

System Requirements: Nearly all Vista PCs, and newer or beefier XP machines, should be able to run Windows 7 fine. Even the netbooks I tested ran it speedily, especially with the Starter Edition, which lacks some of the powerful graphics effects in the operating system. (Other netbooks will be able to run other editions.)

If you have a standard PC, called a 32-bit PC, you’ll need at least one gigabyte of memory, 16 gigabytes of free hard-disk space and a graphics system that can support Microsoft technologies called “DirectX 9 with WDDM 1.0.” You’ll also need a processor with a speed of at least one gigahertz. If you have a newer-style 64-bit PC, which can use more memory, you’ll need at least two gigabytes of memory and 20 gigabytes of free hard disk space. In either case, you should double the minimum memory specification.

Aero Peek lets you see your desktop by making your windows transparent.

Installation, editions and price: There are four editions of Windows 7 of interest to consumers. One, a limited version called Starter, comes pre-loaded on netbooks. A second, called Professional, is mainly for people who need to tap remotely into company networks (check with your company to see if you need this). A third, called Ultimate, is mainly for techies who want every feature of all other editions. Most average consumers will want Home Premium, which costs $120 for upgrades.

The system for upgrading is complicated, but Vista owners can upgrade to the exactly comparable edition of Windows 7 while keeping all files, settings and programs in place.

Unfortunately, XP owners, the biggest body of Windows users, won’t be able to do that. They’ll have to wipe out their hard disks after backing up their files elsewhere, then install Windows 7, then restore their personal files, then re-install all their programs from the original CDs or downloaded installer files. Then, they have to install all the patches and upgrades to those programs from over the years.

Microsoft includes an Easy Transfer wizard to help with this, but it moves only personal files, not programs. This painful XP upgrade process is one of the worst things about Windows 7 and will likely drive many XP owners to either stick with what they’ve got or wait and buy a new one.

In my tests, both types of installations went OK, though the latter could take a long time.

Bottom line: Windows 7 is a very good, versatile operating system that should help Microsoft bury the memory of Vista and make PC users happy.

Correction: The edition of Microsoft’s Windows 7 operating system aimed at business users is called Windows 7 Professional. This week’s Personal Technology column erroneously stated it was named Business.

Write to Walter S. Mossberg at walt.mossberg@wsj.com

]]> http://allthingsd.com/20091007/a-windows-to-help-you-forget/feed/ 0 http://allthingsd.com/20090220/heres-a-patch-for-you-adobe-acrobatuninstallexe/ http://allthingsd.com/20090220/heres-a-patch-for-you-adobe-acrobatuninstallexe/#comments Fri, 20 Feb 2009 17:03:56 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=13265 There’s a critical vulnerability in Adobe’s Reader and Acrobat PDF software and at least one zero-day exploit for them in the wild already. Yet Adobe (ADBE) won’t have a fix in place until March 11, and then only for Adobe Reader 9 and Acrobat 9. Patches for earlier versions of the software will arrive sometime after that.

Two and half weeks or longer to wait for a critical patch.

In the meantime, exploits for the flaw will no doubt grow in number and cunning–a nightmare since the PDF format and Adobe’s related apps are so widely used. “Right now we believe these files are only being used in a smaller set of targeted attacks,” security group Shadowserver said in an advisory on the matter. “However, these types of attacks are frequently the most damaging and it is only a matter of time before this exploit ends up in every exploit pack on the Internet.”

Shadowserver recommends disabling Javascript in Acrobat and Reader to limit exposure to such attacks. There are, of course, other solutions as well–Foxit for Windows users, Preview for Mac users, and Xpdf for Linux users.

]]> http://allthingsd.com/20090220/heres-a-patch-for-you-adobe-acrobatuninstallexe/feed/ 3 http://allthingsd.com/20080214/big-update-for-vista-leaves-little-changed-for-mainstream-users/ http://allthingsd.com/20080214/big-update-for-vista-leaves-little-changed-for-mainstream-users/#comments Thu, 14 Feb 2008 00:01:00 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20080214/big-update-for-vista-leaves-little-changed-for-mainstream-users/ Microsoft plans next month to roll out the first major update to its Windows Vista operating system, which was introduced in January 2007. There have been a number of smaller patches to Vista, but this one, called Service Pack 1, is pretty large, a 65-megabyte download, and includes hundreds of small fixes and improvements, including some performance gains.

The arrival of a large update like this isn’t a sign of trouble, or even unusual. Microsoft has routinely issued these large “service packs” periodically for Windows. And just this week, its competitor, Apple, unleashed an even larger update for its new operating system, Leopard.

Even though they can take a long time to download and install, such updates are generally a good thing for consumers. Microsoft will automatically deliver SP1, as the company calls it, through its normal updating mechanism, built into Windows. The update is free.

However, based on my tests of Vista SP1, I believe that for most average consumers, it will likely be a nonevent, and for others it will be disappointing. Many of its benefits are aimed at corporations and power users, or are under-the-hood fixes that are hard to discern. For mainstream users, it adds no significant, visible features to Vista, and changes little or nothing about the way the operating system looks and works.

Also, SP1 doesn’t resolve some of the most annoying flaws in Vista, including slow start-ups and reboots, and a security system that nags you too much and requires add-on anti-virus software. I guess these problems will either never be fixed fully or will have to wait for SP2.

While Vista SP1 does deliver some performance improvements in certain scenarios, it can actually temporarily degrade performance — including making reboots even slower — because of a quirk in the update process. This slowdown should go away in a few days, the company says.

On balance, the update is probably worth installing, especially since Microsoft will deliver it automatically. But I wouldn’t rush to grab it and I wouldn’t expect much from it. One note: you can’t install SP1 until you have installed a couple of other patches first. These will also be distributed automatically.

I installed Vista SP1 on two computers that had come with the original Vista preinstalled: a 10-month-old Sony Vaio SZ laptop and a two-month-old Dell XPS One desktop. Because the automatic download distribution isn’t yet in place, Microsoft sent me the update on a disk, which also included the prerequisite patches. In each case, the upgrade took a little over an hour and went smoothly. During the process, the computers rebooted multiple times, but it was all automatic and didn’t require user intervention.

After the installation, the computers functioned normally. I tested three of the performance improvements Microsoft claims for SP1. The first involved speeding up the copying of hefty folders containing large numbers of files. On both machines, copying a folder containing over 700 files totaling almost 700 megabytes took less than half as long with SP1 as it had with the original Vista.

I also tested how long it took both machines to awaken from a hibernation or sleep state and be ready for work. For these tests, I began with each machine running Microsoft Word, Microsoft Outlook and the Firefox Web browser, then I forced them into sleep and hibernation mode.

By my definition, “ready for work” means that Vista’s circular delay indicator has gone away, the software that loads at start-up has finished launching and the computer has fully reconnected to its wired or wireless network. On both of my test machines, SP1 improved the recovery time from sleep or hibernation, shaving one to 10 seconds from the procedures.

Microsoft doesn’t claim SP1 will improve the speed of cold starts and reboots under Vista, but I tested these anyway. To my horror, I found that SP1 actually made rebooting — already slower than on comparable Windows XP computers or Macintoshes — even slower.

Microsoft explained that this was due to the fact that installing SP1 erases certain data used by Vista to speed up program launching. It takes the system a few days to build this data back up, the company says. Until then, it says, overall performance, including reboots, can be slower under SP1 than under original Vista.

Microsoft provided me with a method that would rebuild this program-launching data more quickly, at least for the common programs I was using in my tests. Once I followed that method, rebooting time returned to its former state — still too slow for my taste, but at least not worse.

In briefing me on SP1, Microsoft made a big point of saying that great progress had been made in the past year in making Vista work properly with add-on devices, such as printers. I tried my 2003-vintage Hewlett-Packard printer, which hadn’t worked properly with the original Vista. It still didn’t work well with SP1.

So, Vista SP1 is a step forward, at least after a few days of use. But it’s not a big step.

Email me at mossberg@wsj.com. Find all my columns and videos online, free, at the new All Things Digital Web site, http://walt.allthingsd.com.

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