The stock is down 24% in midday trading to its lowest point since October after the company reported weaker than expected Q1 sales for display and search ads and took several charges that startled investors. Net income at $9.3M was down 64.1% vs the period last year on revenues of $583.3M, +8.4%. The top line beat forecasts for $577.7M. But with a $12M restructuring charge and a $10M asset impairment charge tied to software development earnings came in at 11 cents a share, well below the 45 cents that analysts expected. The writedown included Patch, the ailing local news service it has contributed to a joint venture.
In addition to the major surprises, many investors were chilled by a 3% year-over-year drop in global display ads, which had improved in Q4, and 1% decline in global search. CEO Tim Armstrong looked on the bright side saying that this was the fifth consecutive quarter of growth in several metrics as AOL seeks to build sales for online video and — his favorite term — programmatic, or computer generated, ad sales. “AOL’s investment in global media and technology platforms is allowing AOL to compete on a global scale,” he says.
Seven months after promising a redesign of Moviefone, owner AOL and partner Whalerock Industries unveiled the revamped website today with a key new feature: Television shows will now be offered in addition to movies on the search site.
“We set out to answer a true market need by addressing the universal question: What do I want to watch, and where can I find it?” said Susan Lyne, CEO of AOL Brand Group, in a joint release with Whalerock founder Lloyd Braun announcing the change. “The new Moviefone is a simple and elegant solution to that challenge,” Lyne added.
Moviefone will continue to feature movie showtimes and ticketing while adding TV channels and streaming services offering movies and television shows. Consumers should be able to easily find a particular episode of a specific season of a television series on a broadcast network, or through Netflix, Amazon, iTunes or elsewhere.
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CEO Tim Armstrong told about 2,000 advertisers at his company’s Newfront presentation today that AOL decided to hold its presentation in the Brooklyn Navy Yard — near the Brooklyn Bridge — to make a point about bridging the gap between TV and digital video. But the unseasonably cold rain left staffers trying to make the best of a bad situation as they huddled annoyed young ad buyers into ferry boats and then into an overpacked warehouse to see brief presentations about AOL’s original programming. “We need to be scouts, curators, wide open to talent … on every platform the tech world is dreaming up,” AOL Brand Group CEO Susan Lyne — formerly President of ABC Entertainment — told the crowd. But the event was filled with familiar personalities including actress Zoe Saldana (her show, My Hero, has celebs visiting people who influenced them), Kevin Nealon (professional comics interact with kids in Kevin Nealon’s Laugh Lessons), and Sarah Jessica Parker (her City.Ballet looks at the New York City Ballet).
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Steve Buscemi is teaming with AOL for unscripted original Park Bench. Set in New York City, the web series is part of the AOL Originals platform which will carry the first season online in the U.S. Production starts this month in NY where Buscemi will interact with everyday denizens of the Big Apple along with his celebrity pals, discussing everything from pop culture to current events. The show is produced by Olive Productions and RadicalMedia, and is intended to convey Buscemi’s relationship with the city of New York and its array of one-of-a-kind characters. “Having lived and worked in New York my whole life, I’m ready to take advantage of all it has to offer,” said Buscemi. “I just need to lay down for five minutes.” FremantleMedia International will shop Park Bench at next week’s Mip-TV. Wren Arthur and Buscemi are executive producing for Olive; Justin Wilkes, Joe Killian and Jon Doran are exec producing for RadicalMedia. Buscemi and Olive are represented by WME, The Gotham Group and attorney George Sheanshang.
AOL has commissioned its first longform video series which is based on the Israeli cable format Mehubarim. Known as Connected in international markets, the observational documentary series will air on premium video platform, AOL On Network. It’s AOL’s first acquisition and adaptation of a new storytelling format which sees the participants film themselves. Created by Ram Landes of Israel’s Koda Communications, the U.S. version of Connected will chronicle the lives of five seemingly disconnected New Yorkers as their parallel stories unfold and eventually come together. Local versions currently air in Israel, Denmark, Estonia, Finland, Holland, India, Ireland, the Netherlands, Norway, Romania and Ukraine. Koda will produce Connected in the U.S. with a debut set for April 29 at AOL’s Digital Content NewFronts. It is then expected to premiere via On Network in January and will be available across a selection of partner sites. Tal Simantov, AOL’s VP of Global Video Strategy, says, “As we expand our original content offerings, and dive into new international markets, it makes sense for us to carry over unique production styles to the United States. Connected has seen major success across the globe, and we are confident that the universal themes and focus on real life will speak just as loudly to American audiences as they have abroad.” Here’s a teaser from AOL that incorporates footage from some international versions:
PBS is partnering with AOL for six new one-hour documentaries as part of its Makers: Women Who Make America franchise. Scheduled to premiere in June and August 2014, the docus build on the multi-platform initiative founded by filmmaker Dyllan McGee, which launched in 2012. The new series expands on the three-hour PBS documentary of same name, which premiered in February 2013 and told the story of the American women’s movement over the last half-century. Kathy Griffin, former CIA agent Valerie Plame, former NASA astronaut Peggy Whitson and the producers of Makers are scheduled to discuss the project at the press tour tomorrow. Among those profiled in the docu-series are Lena Dunham, Chelsea Handler, Shonda Rhimes, and Sarah Silverman. Each of the new documentaries tackles a different sphere of influence, including business, war, space, Hollywood, politics and comedy. Read More »
Turnaround company Hale Global will operate and own a majority stake of Patch, or at least what’s left of AOL chief Tim Armstrong’s dream to create a powerful network of local news Web sites. The companies say that they are “committed to re-launching Patch.” But instead of depending on journalists for news it will become “an efficient platform that allows citizens and businesses to create and share locally-themed news and content.” Patch consists of more than 900 sites and serves more than 16M people a month. Hale CEO Charles Hale says that the partners will take “the necessary steps to ensure Patch remains a vibrant part of the community.” What does that mean? Here comes the AOL jargon: It says strategies include “Technology solutions to make community participation seamless; Mobile-first experience with social integration; National, regional, and local advertising self-service tools; [and] Geo-targeted advertising products.” The companies wouldn’t disclose the financial terms for their partnership deal, which they expect to close by the end of March. Armstrong says that AOL makes “bold bets” and local advertising “will be a growth space during the next decade of the Internet.” But Patch didn’t pay off the way he hoped. AOL took a $25.0M impairment charge and a $19M restructuring charge on the operation in Q3 after laying off 40% of its workforce — about 480 people — in August. Armstrong helped to found Patch in 2007. Shortly after he became AOL’s chief … Read More »
If you look at the Moviefone’s amateurish looking site, which AOL bought for $400M in 1999, you’ll see why it needs work. The company says today that it has enlisted BermanBraun “to reimagine Moviefone and give the iconic entertainment brand a new design and enhanced user experience.” Early next year the site will have “a fresh look and a more robust offering of entertainment news and content as well as a state of the art utility for consumers to find and watch premium content on all devices.” Susan Lyne, who’s CEO of the AOL Brand Group, worked with BermanBraun principal Lloyd Braun at ABC where they developed shows including Lost, Desperate Housewives, and Grey’s Anatomy. The Hollywood-based media company has helped AOL shape sites including Mandatory, Pawnation, and Skye. With that background “we are excited to partner with them to ensure Moviefone becomes a premiere, multiscreen destination for movie news and information,” Lyne says. Braun and his partner, Gail Berman, say they will “reimagine Moviefone as a vital and essential entertainment brand for the mobile generation.”
So much for all those inaccurate media reports that Arianna Huffington’s piece of the HuffPo-AOL deal was around $100 million. In fact, her share was less than 7% of the $315 million sales price. The Smoking Gun today posts a new court document stemming from an ongoing lawsuit. Marked ‘Confidential’ and ‘Attorney’s Eyes Only’ and dated February 2011, the memo prepared for AOL board members shows Arianna received about $21M. And $3.4M of that came in the form of stock options that would vest about 20 months after the deal closed and another $3M in stock options and restricted stock units. The document came to light because of a lawsuit by two consultants accusing Ariana and her business partner Kenneth Lerer of stealing the idea for HuffPo.
This was the shoe everyone was waiting to hear drop as AOL chief Tim Armstrong abandons his ambition to blanket the country with web sites offering hyper-local news. He told staffers at his Patch network of news destinations that 40% of them — about 480 people — will be laid off, media watchdog Jim Romenesko reports. AOL will continue to operate 60% of the sites. It will join partners to keep 20% open, and another 20% will either be consolidated or closed. “The people leaving Patch have played a significant role in making Patch an integral part of the communities it serves – and we thank them for their hard work and passion for Patch,” the company says. Today’s announcement comes about a week after Armstrong committed a colossal PR blunder by coldly firing Patch creative director Abel Lenz in the middle of a public meeting. The CEO later admitted it was a “mistake,” but excused his bullying as an “emotional response at the start of a difficult discussion dealing with many people’s careers and livelihood.” Armstrong helped to found Patch in 2007. Shortly after he became AOL’s chief executive in 2009, the company paid about $7M to acquire it. He also invested heavily in the operation, calling community-level advertising “one of the largest commercial opportunities online that have yet to be won.” As losses continued Patch shifted its focus away from journalism. Armstrong told analysts last … Read More »
AOL and other web video providers showed with their NewFront presentations — timed to coincide with the TV networks’ upfronts in May — that they’re serious about trying to siphon ad dollars that typically go to broadcast and cable networks. Now AOL’s Tim Armstrong says he wants to take the next step by introducing the AOL Networks Programmatic Upfront on September 23, designed to become an annual event. The term “programmatic” refers to display ads that companies including Google and Yahoo sell in auctions, typically handled just by computers. The problem: “The online advertising industry has created a fear and chaos-based environment filled with hundreds of small companies each pitching highly technical necessities” for advertisers to reach audiences, Armstrong says in a blog post this morning. “They can’t shift their budgets from TV until we — as an industry — demonstrate the true power of digital to unlock creativity.” AOL’s “Programmatic Upfront” will feature marketers and agency execs explaining why advertisers should “pre-allocate media budgets against large scale display inventory,” he says. This market is growing fast: Advertisers are expected to spend $3.36B this year on real-time bidding, and eMarketer forecasts that it will grow to $8.49B in 2017, accounting for 29% of digital display spending.
EXCLUSIVE: Alex Winter’s documentary about about the rise and fall of Napster has a new online home. AOL will be making Downloaded available to visitors to its on.aol.com via streaming later this year. This is the portal’s first foray into longform streaming as a part of the distribution deal between the brand company and VH1, which is showing the film theatrically. Downloaded will be on AOL after its big-screen release this summer by the Viacom-owned broadcaster’s VH1 Rock Docs in partnership with Cinetic Media and Richard Abramowitz. The film on the legacy of file sharing pioneer premiered at this year’s SXSW Film Festival. Downloaded will also be on Cable VOD and iTunes later this year as well. “We sold the film to AOL at SXSW,” ,” Winter told me. “Cinetic’s John Sloss, VH1 and I made a deal with our partners that focused heavily on digital/streaming and still gives us room for theatrical and CVOD. It’s a new frontier for distributing movies, and the Internet is finally monetizing in a way that can work for everyone.” The film was directed and executive produced by Winter and executive produced by Maggie Malina. Executive producers for VH1 are Brad Abramson, Warren Cohen, Rick Krim, Bill Flanagan, Shelly Tatro, and Jeff Olde
A lot of people in the corporate communications community were eager to see who would win this high-profile gig. Peter Land will be an SVP, reporting to AOL chief Tim Armstrong in New York. The CEO says Land will “develop and oversee AOL’s global external and internal corporate communications strategies” and “work in concert with our investor relations, government affairs and public policy groups.” Land’s PR team at Pepsi won the Public Relations Society of America’s 2011 Public Relations Professional of the Year award for a project that encouraged people to offer ideas to enhance their communities that the company then helped to fund. Before joining Pepsi, Land worked at Edelman, the NBA, and Kraft Foods.
NEW YORK–(February 28, 2013)–Susan Lyne, Vice Chairman of Gilt and AOL board member, has been appointed to run AOL’s portfolio of brands that serve over 100 million consumers globally. Lyne will oversee all aspects of the Brand Group’s growth strategy, including increasing traffic across properties, maximizing partnerships with advertisers and publishers, and attracting top talent, with a particular focus on content, design, programming, and product. Lyne recently transitioned from her role as Chairman of Gilt to become Vice Chairman. She will continue in that role. Lyne’s appointment is part of AOL’s continued efforts to streamline its operations and give its business unit leaders more autonomy and accountability. AOL has three business units –The Membership Group, which consists of offerings that serve AOL account holders, AOL Networks, which consists of AOL’s offerings to publishers and advertisers utilizing AOL’s third-party advertising network, and the Brand Group, which consists of AOL’s portfolio of distinct and unique content brands. All three business units were overseen by AOL’s Chief Operating Officer, Arthur “Artie” Minson, who will stay with the company for a transition period.
Related: Susan Lyne To Run Content At AOL – But Not Huffington Post: AllThingsD
The former president and CEO of Martha Stewart Living Ominimedia and ABC Entertainment chief is close to joining AOL as CEO of its content brands, according to AllThingsD’s Kara Swisher. Susan Lyne would have oversight over brands like Engadget and TechCrunch but not The Huffington Post, whose group is headed by Arianna Huffington. Lyne has served on the AOL board of directors since 2009 and is also Vice Chairman of the Gilt Group after joining the online retailer as CEO in 2008. Before that she was president at MSLO. As ABC Entertainment’s boss she spearheaded series like Desperate Housewives and Grey’s Anatomy.
Shares are up about 7% in pre-market trading after AOL reported a milestone that investors have been waiting to see: Its revenues have finally picked up as gains from ad sales outpaced the declines from its ancient (in Internet terms) Web subscription business. The company says that in Q4 it generated $35.4M in net income, +55.3% vs the period last year, on revenues of $599.5M, +3.9%. The top line number is well ahead of the Street’s expectation for $573.7M. Earnings at 41 cents a share matched the consensus forecast. AOL says that global ad sales were up 13% while subscription revenues fell 10%. The company had 2.8M domestic Internet subscribers at year end, -15%. Revenues at the Brand Group — which includes some of AOL’s most popular Web destinations including the Huffington Post, Moviefone, and its Patch local news sites — were up 4% to $213.2M, but increasing expenses resulted in a 34% decline in cash flow to $8.8M. Read More »
Here’s a friendly suggestion for the execs at AOL. Lay off the jargon and industry gobbledygook when you announce a change that’s supposed to clarify what your business is all about. The release this morning about the rebranding of the Advertising.com Group — making it AOL Networks — is a case in point. We’re talking about the operation with ad sales business Advertising.com, video site AOL On Network, and other ad services including goviral, ADTECH, and Pictela. So the AOL Networks name is more all-encompassing than Advertising.com Group? I think so. But someone at the company apparently wanted the explanation to sound more, well, pompous. The release says the new AOL Networks name “should help all stakeholders better understand the rich stack of assets and robust technology it brings together” and ”clearly represents the recognized cross-screen offerings across premium, programatic and performance advertising.”
Got it? No? Perhaps the quotation from AOL Networks CEO Ned Brody can help: “AOL Networks will Read More »