Everyone likes AOL CEO Tim Armstrong. But they're not sure he has any clue what he's doing. Especially now that yet another senior AOL content executive—Mike Porath, editor of AOL News—is headed out the door.
Mike's departure follows on the heels of the exits of Bill Wilson, head of the whole content division, and Mike Rich, who ran AOL Music, Moviefone, et al. Bill Wilson got canned, but the other departures appear to have been voluntary. In the case of Mike Porath, moreover, uncertainty over AOL's future content direction contributed to the decision.
These departures increase the uncertainty inside the content division, which insiders say is causing concern and confusion among the troops. The root of the problem, say insiders, is that AOL's senior management has not yet articulated a clear content strategy, one in which they explain how all the parts will fit together.
Tim Armstrong (above, left) has expressed a strong desire to turn AOL into the Time, Inc. of the 21st Century—a content production engine with great premium brands, super search-engine-optimization, a booming local news business, and a revolutionary freelance assignment and management tool that will give voice to thousands of aspiring journalists around the world. Tim has spoken often of AOL's commitment to journalistic excellence as well as its commitment to finally figuring out the sustainable low-cost online content-production and distribution model that is eluding most traditional media companies.
And that sounds good. Insiders believe that Tim's heart is in the right place. They also believe that AOL may eventually be able to cobble its myriad divisions and properties and strategies into a more unified whole. But there's a huge gap between theory and execution, and right now, AOL's content strategy is a mess.
The recent executive departures, for example, leave Saul Hansell, head of AOL's content-farm Seed.com, sort of reporting to Dave Mason, the head of a video production company called StudioNow that AOL bought a few months ago. Neither Dave nor Saul have control over AOL's premium sites, which is where much of the content that Seed and StudioNow produce will presumably appear.
The Seed.com content-farm model, meanwhile, is currently only facilitating one aspect of freelance content production, which is advertising assignments and collecting copy. To figure out what assignments to post on Seed, Seed folks have to liaise with the editors of AOL's premium sites, who don't really know how to interact with them. For the copy to actually appear on AOL pages, meanwhile, it needs to be edited, and the editors of AOL's premium sites are currently having to edit it by hand.
AOL's South by Southwest experiment, for example, in which the company set out to interview each of 2,000 rock bands, produced a boatload of copy that the editors of AOL's premium music sites are said to have worked all hours to edit and post over the course of a week. Editing is a big part of the cost of quality content production, so if Seed.com contributors need to be heavily edited, the "low cost" aspect of the production engine won't work.
Then, to make matters worse, Tim Armstrong was quoted as suggesting that the SXSW effort was evidence of AOL's ingrained mediocrity, one in which he had had to personally intervene at the 11th hour to fix. The article apparently caused enough consternation internally that Tim had to hastily call a meeting to tell the troops that he had been misquoted.
The central tension within the content division seems to be the lack of a clearly articulated strategy. AOLers are not clear whether AOL's Google management intends to pursue a Demand-Media-like content farming strategy, in which editors and writers are perceived as annoyingly-high costs, or a premium content strategy, in which editors and writers are viewed as rare and valuable talent who can build big standalone brands.
If AOL's strategy is the latter, the question is how Seed.com, Patch.com, StudioNow, and AOL's other new content production initiatives will fit into it. At branded publications, editors rule: They assign stories, edit copy, and decide what goes where. One can certainly envision editors using Seed in the normal course of business (as a freelancer-management tool), but it's not clear where this would leave Saul Hansell, a career New York Times veteran who presumably didn't join AOL to run a back-room payment-and-assignment operation.
If Seed, Patch, et al, are the primary engine of AOL's content strategy, on the other hand, where does this leave the expensive editors and writers who are working to develop brands like Fanhouse, Spinner, Engadget, Daily Finance, and other premium properties? If AOL's goal is to spew out thousands of pages of SEO-able content each day—and if AOL's premium advertisers can be persuaded to buy mass-produced dreck for the same prices they pay to buy premium content—why bother to have expensive (and no doubt temperamental) writers and editors on the payroll? Why not be, well, more Google-like about it, fire all the content people, and just invest in algorithms?
And then there's the larger problem: Tim and AOL's senior management have yet to make hard decisions about what to keep and what to dump. AOL is still a grab-bag of mostly unrelated businesses: Mail, MapQuest, ICQ, AIM, blogs, News, Finance, an ad network, a social network, a local news business, a content farm, an ISP, and a portal—all assembled in the service of an ancient online business model that no longer exists. Lack of focus is still a major problem at AOL, and if the company doesn't sharpen its focus quickly, it will continue to be a jack of all trades and a master of none.
AOL does appear to have an opportunity to create the Time, Inc. for the 21st Century. The tools, building blocks, and scale are there. But it's not going to happen without a very clear strategy, one in which each part knows exactly what its role is in the supporting the whole — and in which everything that doesn't support that strategy is closed or sold.
Until that strategy is in place, AOLers (and investors) will remain uncertain and confused. And AOL will continue to piss away talent, traffic, and opportunity.