Following its recent megadeal to acquire The Huffington Post for $315 million, AOL wants to get smaller and more editorially focused.
That focus is driven by the need for profitability and improved quality, according to chairman and CEO Tim Armstrong, who sat for a keynote interview on Thursday (March 10) at the Bloomberg 2011 Media Summit in New York.
During the hour-plus interview, Armstrong confirmed the company’s new round of layoffs, saying, “Today is a very difficult day at the company.” But Armstrong mostly struck an optimistic, almost defiant tone during the sit-down, predicting that AOL would start to exhibit the same double-digit ad revenue increases the rest of the online industry has been enjoying.
Comparing the company to Rocky Balboa taking a beating from Clubber Lang in Rocky III, Armstrong said, “At some point, we won’t be against the ropes . . . watch our right hook.”
Armstrong said the painful staff reductions were in part driven by a need to better focus AOL’s brand strategy—and probably reduce some duplication with HuffPo, TechCrunch and other recent acquisitions. When he joined the company, AOL had 340 URLs. Now there are just 40.
Plus, personnel-wise, AOL is about half the size it was when Armstrong came on board. And the employee mix wasn’t right; two years ago AOL had as many engineers as editorial staffers. “That’s not an Internet company,” he said.
Despite all the change and staff reductions, Armstrong emphasized that traffic has remained stable or grown during his tenure, depending upon the property.
However, Armstrong announced that AOL is planning to hire more journalists and lessen its reliance on freelancers. At the same time, he defended the company’s Seed platform, which is often derisively referred to as a content farm. “Technology for journalists is not bad,” he said. “The press at large has written these unbelievable, crazy articles.”
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