AOL Debuts New Content Division

Bill Mickey – AudienceDevelopment.com

01/14/2009

Shortly following reports that Time Warner will be taking an impairment charge of $25 billion in 4Q 2008, its AOL subsidiary debuted MediaGlow, a newly-named publishing unit intended to centralize AOL’s content operation. The debut completes AOL’s plans to reorganize under three core businesses—an advertising platform called Platform-A, a social media division called People Networks, and MediaGlow.

In 2009, the unit plans to develop at least 30 “editorially curated” sites, emphasizing a strategy of further breaking down vertical categories such as sports and news into smaller niche sites. The new brands will be added to a stable of about 75 other content sites that range from hip-hop site TheBoombox.com to entertainment site TMZ.com.

Bill Wilson, formerly EVP of programming for AOL, will become president of the new unit.

While Time Warner noted that part of the impairment was due to lower than expected ad revenues from both the publishing and Internet groups, AOL says its sites attract 70 million “unduplicated users” with 40 percent page view growth and 20 percent growth in engagement. The announcement noted “double-digit increases in vertical content advertising revenue year-over-year in Q3 2008.”

The fragmented, network effect is the culmination of AOL’s gradual divorce from a portal strategy. “Gone are the days when one general portal or social networking site addressed the needs of all consumers,” said AOL president and COO Ron Grant. “Today’s fragmented online environment requires programming that targets people’s passion points at scale across a range of unique sites.”

Indeed, Wilson told The New York Times that the niche sites are intended to be their own destinations, the AOL.com site will recede as the primary traffic diver.