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Latest CEO pet project to fail: AOL's Patch

Jeff Brown, Special to CNBC.com
Monday, 16 Dec 2013 | 3:34 PM ET
Tim Armstrong, CEO and chairman of AOL
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Tim Armstrong, CEO and chairman of AOL

Recapping the day's news and newsmakers through the lens of CNBC.

Notes:

One of the toughest executive decisions: how long to hope that a few tweaks will turn around a money-losing venture. Business professors will have a new case study now that AOL has finally given up on its Patch local news sites.

The idea that local news can attract readers who will attract advertisers is a Holy Grail of the news business, and has been the undoing of many a news executive. AOL CEO Tim Armstrong hatched Patch in 2007 while an executive at Google, then convinced AOL to buy it after he took over there.

Many observers, including AOL shareholders, felt Armstrong clung to Patch with a kind of blind paternal love. Fortunately for Armstrong, the rest of his AOL turnaround strategy has done well, and the stock is up 45 percent this year.

Quotes:

"Mr. Armstrong's big dream had become a nightmare that wore out his shareholders and set off a proxy fight in 2012. ... The insurgents lost the war, but turned out to be right."—David Carr, The New York Times

"At the end of the day, could Patch have been run better? We don't know. ... Patch was one of the big bets that we made, among others, and I still believe local will be a big opportunity whether it is Patch or someone else."—Armstrong


Federal Reserve Bank Chairman Ben Bernanke prepares to deliver the Herbert Stein Memorial Lecture during the National Economists Club Annual Dinner November 19, 2013 in Washington, DC.
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Federal Reserve Bank Chairman Ben Bernanke prepares to deliver the Herbert Stein Memorial Lecture during the National Economists Club Annual Dinner November 19, 2013 in Washington, DC.

Market confidence (or lack thereof)

Notes:

Something freaky happened to U.S. stocks late Sunday. A little after 10 p.m., prices plunged in futures trading, which goes on 24/7. The E-mini futures contracts for the S&P 500, Dow and Russell all plunged, with the S&P off about 0.65 percent in less than a minute. It recovered by 4 a.m. Monday and opened higher.

What happened? A computer glitch? Experts are still scratching their heads, but some believe the dip was caused by a whale of an order. Recent low trading volumes can magnify the effects of big trades, and the markets are often volatile in December and before Federal Reserve meetings, like the one this week.

Quote:

"The talk is of a large order, but there is no consensus as to whether it was a 'fat finger' error or just an awful execution—or maybe just price manipulation to see if they could force stops below a technical level."—Jim Iuorio of TJM Institutional Services

Healthcare.gov
Adam Jeffery | CNBC
Healthcare.gov

State of the Obamacare Union

Notes:

You've heard of the glass-half-full brand of optimism, but how about feeling good because the glass is a quarter full?

That, essentially, is the solace Obamacare supporters can take from a new CNBC All America Economic Survey. It finds the portion of Americans with positive views of the Affordable Care Act declined, though only a little, from 29 to 26 percent, between September and December. That was when we had all the brouhaha over the plan's messed up website. Negative attitudes rose just one percentage point to 47 percent, and neutral ones fell only 2 points to 11 percent.

Total Cost: $57,711Tuition: $43,581Room & Board: $13,137Fees: $993Founded in 1890 with the help of a large donation from John D. Rockefeller, University of Chicago has produced Nobel Laureates, Fields Medalists and Rhodes Scholars at an impressive rate, and its nicely funded: in 2010 it received a  gift to its endowment fund, the 12th-largest such contribution for any school that year.Attending such a prestigious university doesn’t come cheap: the total cost to attend is $57,711 for the 2012-2013 academic year. According to its  the school has a financial aid budget of $93.8 million for this academic year, and the average scholarship is $37,500.
Luiz Gadelha Jr.
Total Cost: $57,711Tuition: $43,581Room & Board: $13,137Fees: $993Founded in 1890 with the help of a large donation from John D. Rockefeller, University of Chicago has produced Nobel Laureates, Fields Medalists and Rhodes Scholars at an impressive rate, and its nicely funded: in 2010 it received a gift to its endowment fund, the 12th-largest such contribution for any school that year.Attending such a prestigious university doesn’t come cheap: the total cost to attend is $57,711 for the 2012-2013 academic year. According to its the school has a financial aid budget of $93.8 million for this academic year, and the average scholarship is $37,500.

University endowment

Notes:

Bills are going out now for colleges' second semesters. If you're writing one and are not aggravated enough already, this will do the trick. The presidents of 42 private colleges made more than $1 million a year in 2011, the last year for which data is available. The median for 500 schools polled was a bit over $410,000, up 3.5 percent from the year before.

The University of Chicago's Robert Zimmer topped the list at $3.4 million. He received $1,113 for every $1 million in the university's budget. From that perspective, Zimmer trailed many presidents. Of the 500, the median earned $5,466 for every $1 million spent.

By Jeff Brown, Special to CNBC.com

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