The office at Ninth Street and Broadway in Manhattan in the former Wanamaker’s department store has all of the trademarks of a well-financed digital start-up. Young people eat pizza and chat about applications while others are jammed into conference rooms discussing search optimization. The only oddity in the futuristic tableau comes when you step off the elevator to see three large letters: A O L.
The name AOL, apart from conjuring echoes of the most disastrous merger in business history, redounds with the archaic sound of a phone-driven modem screeching as it connects with some fusty computers sequestered in Dulles, Va., the former headquarters of the company.
But AOL, often derided as the original gated community, is now manufacturing a broad array of digital media that is free for the grabbing. There are 300 working content producers in its New York headquarters, backed by hundreds of other freelancers and programmers in Bangalore, Dublin and Dulles, cranking out copy and editing photos for more than 80 Web sites. Ten are ranked in Technorati’s top 100. Politics Daily, which began in April, already has 3.6 million unique users a month, while Politico, a much more established name, has 1.1 million. In the aggregate, the media properties at AOL have about 76 million unique visitors.
Part of the way that AOL has been able to achieve quick credibility is by grabbing talent that is on the loose because of trouble in the rest of the industry. At Politics Daily, there are many recognizable names, including Melinda Henneberger, formerly of The New York Times; Carl Cannon, who worked for years at major daily newspapers and National Journal; and Walter Shapiro, who worked at The Washington Post, USA Today, Time and Newsweek.
Todd Pruzan and Jeff Bercovici, both of the shuttered Portfolio, work for DailyFinance, while AOL’s FanHouse sports site is deep in newspaper veterans, including Kevin B. Blackistone, a former columnist for The Dallas Morning News, and Greg Couch, formerly of The Chicago Sun-Times. According to some I spoke to, their salaries approach the ones they left behind.
“I’m not going to deny that the availability of talent has accelerated many of our efforts,” said Martin Moe, who is in charge of the news sites at AOL, including Politics Daily and DailyFinance. “Suddenly, in the last 18 months, this huge pool of talent has become available.”
Visitors to sites like Engadget and FanHouse may not know that those sites emanate from a company that used to confine most of its communication to telling them they’ve got mail. Which is sort of the idea.
After the merger with Time Warner was announced in 2000, it was thought that AOL would serve as a digital outlet for all manner of the company’s content, but those potential synergies never materialized, to say the least. And while the leadership of AOL won’t say it aloud, they sound like they want to be the Time Inc. for the next generation.
Since he arrived in April, Tim Armstrong, chief executive of AOL and the former head of sales at Google, has made it clear that he expects AOL, using its MediaGlow division, to be one of the largest sources of ad-supported content on the planet. He’s a bit more chaste in person.
“We are just a small little company that has gone through some challenging times that is trying to find a way to come up with ideas that will connect with an audience,” he said, smiling, when I bumped into him on a tour of the office.
Mr. Armstrong doesn’t think it’s important that customers of Black Voices, BloggingStocks or Stylelist need to know it was all brought to you by AOL.
“I am not sure that is important to the audience that Disney owns ABC or ESPN, so in the same way, FanHouse, our sports site, will live or die on its connection to the audience,” he said. “We can light a fuse, but whether or not it comes to fruition is reliant on the content.”
It is not unlike how all the major brewers responded to the influx of microbrews. They simply brewed up their own small-label brands or bought existing ones, and kept their own brand in very tiny print deep in the label where most beer drinkers can’t be bothered to look. Nick Denton, who has had some success at Gawker Media on a smaller scale with federated blogs, said it makes sense for AOL to minimize its imprimatur.
“If the sites are to seem authentic, they can’t be so obviously the product of an unimaginative conglomerate,” he said in an instant message. “That said, they didn’t do themselves any favors with some of the names. Politics Daily? Snore.”
Of course, as many newspapers have found out, you can’t create a blogger simply by having someone from mainstream media work in their pajamas. But building from its purchase of Weblogs from Jason Calcanis in 2005, AOL has managed to develop a number of sites with rabid fans and traffic that comes from all corners, not just the portal.
“Advertisers want reach, engagement and scale, and we want this to work,” said Rob Norman, chief executive of GroupM Interaction, a unit of ad giant WPP. He said that in spite of the many fizzled efforts to remake AOL, “you now have leadership in place who has a clear understanding of the economics and strategies for creating great content.”
By some reports, Web advertising inventory is doubling every year, and there is little leverage on price even for the most trusted brands in a brutal spending environment. Still, being associated with AOL does give the sites a competitive advantage.
“We can make significant investments in quality content, and yes, use our traffic,” said Bill Wilson, president of AOL Media. “But there have to be inbound links for organic growth and people sending it out across the social Web.”
This is probably version 8.0 of the revolution at AOL, none of which have stemmed its steady decline. When its core dial-up business began to falter, AOL was going to be the next Windows. Then it was going to be the largest media company in the world by virtue of a merger with Time Warner. Then it was an entertainment channel.
Next up was an emphasis on the member experience, then a jab at providing broadband, followed by portal initiatives, free e-mail and then a huge advertising initiative called Platform A. Along the way, there was talk of a sale, changes in leadership and general malaise mixed with management mayhem.
Finally, perhaps tired of all the zigzagging from a declining asset, Time Warner announced plans to spin the enterprise out on its own by the end of this year.
And wouldn’t it be funny if about the time that Time Warner forced AOL to stand on its own two feet, it actually was able to?