AOL Struggling With Life Outside The Walled Garden

from the what-business-are-you-in? dept

On Tuesday morning 1200 AOL employees received their severance packages as the company continues trying to find its footing outside of the walled garden. Evidently, the transition to an advertising-supported web portal isn't going as well as they hoped. A memo from AOL CEO Randy Falco suggests a couple of the reasons they might be having problems. First, it's not clear whether they consider themselves fundamentally a technology company or a media company. Some of their products—especially email and MapQuest—face technology-focused competitors like Google and Yahoo who have been rapidly improving their products' capabilities. Others, such as "Food" and "Money & Finance," are competing more with traditional media outlets like CNN or the New York Times. The two types of companies tend to have different corporate cultures and pursue different business strategies, so being evenly split between the two might not be such a good strategy. Falco's memo also focuses a lot on AOL's advertising platform, but that seems like putting the cart before the horse; if you don't have a compelling product and growing traffic numbers, the best advertising platform in the world won't help. AOL may also be handicapped by the perception by many (including me) that AOL is the Internet for beginners. That was a great perception to cultivate when a lot of people were using the Internet for the first time, but it's not so great once most Internet users start to feel comfortable with the Internet and want to take the training wheels off. I have a feeling that this week's layoffs won't be the last of the painful changes at AOL.

Filed Under: business models, media, technology
Companies: aol

Google, AOL, Yahoo And Microsoft All Sued Over Excessively Broad Auction Patent

from the innovation-at-work dept

In the latest silly patent lawsuit to be filed in Marshall, Texas a company holding a patent on using gaming to determine the final price of an auction system. The company is now claiming that Google, AOL, Yahoo and Microsoft are all violating the patent with their ad auction models. The interesting thing here is that the patent is clearly talking about a very different system. It describes a process of setting a range for a price, and then allowing some sort of game ("a video game, electronic board game, sports bet, card game") to determine what the actual final price is within that range. Of course, that doesn't sound at all like what the various companies listed here are doing. However, that's where whoever drafted the patent earned his or her money. Rather than limiting it to games like those listed, the following phrase was also added: "or any other activity." This is right out of the standard patent attorney's playbook for creating super broad patents -- though it goes against the entire purpose of the patent system. None of the companies involved built their businesses based on this patent. They certainly didn't get the idea for an ad auction based on this patent. Instead, this is just some company taking an overly broad patent and trying to apply it to big, rich companies, in the hopes of scoring some kind of cash settlement. That's not what the patent system is designed to do.

Filed Under: business models, patents
Companies: aol, google, microsoft, yahoo

One Year After Tearing Down The Walls, AOL Still An Also-Ran

from the free,-as-in-CDs dept

Last year, in a move that came only six years too late, AOL decided that walled gardens were out and that free web services were in. For a brief period, there was a flurry of news about AOL's attempt to reinvent itself as a Yahoo-like portal. With the walls torn down, the challenge for management was to actually give people a reason to use AOL's services, thus driving up traffic and ad revenue. Simply being free would not be enough to bring people back unless there was a compelling reason. A year later, it doesn't look like the company has accomplished this. Earnings guidance was recently reduced as the company's growth rate continues to lag behind the industry average. As Wall Street gets antsy over its performance, it seems likely that we'll hear renewed calls for Time Warner to just dump AOL and finally wash its hands of the whole affair. AOL's problem is the same one facing Yahoo: it's not Google. The difference is that Yahoo still has a lot of market share and traffic to work with. Both companies have made several acquisitions in the past year or so in an attempt to reinvent themselves, but unless one of them stumbles onto the next MySpace, Facebook or YouTube, it's unlikely that acquisitions will hold the key to a turnaround.

Filed Under: free, walled garden
Companies: aol, google, time warner, yahoo

Michelle Santangelo Sues Kazaa, AOL And Anyone Else She Can Think Of For Her Getting Sued By The RIAA

from the questionable-lawsuits dept

We've been following the story of Patti Santangelo and her family's fight against the RIAA for some time -- but the latest moves by the Santangelo family seem a bit scattershot. Santangelo, of course, was one of the first people to fight back against a bogus RIAA lawsuit. This was fantastic, as many others simply settled, rather than going through the trouble of fighting the questionable charges (especially in cases where parents were sued for the actions of their kids). A year and a half later, the RIAA finally admitted it didn't have any evidence against Patti Santangelo and dropped the case (and tried to get out of paying her legal fees), but then quickly sued her kids instead. This wasn't a huge surprise. The RIAA had been secretly investigating her kids for some time. However, the response of the kids has been a bit questionable. Patti's son Robert's response included every argument in the book against the RIAA -- including a number of weak ones that could hurt his case more than help it. There are a few strong arguments that can be used against the RIAA. Including a bunch of very weak ones probably doesn't help. Now, Patti's daughter Michelle is taking a similarly broad approach, not in responding to the RIAA, but in blaming everyone she can possibly think of for the fact that she was sued by the RIAA. She's filed lawsuits against Kazaa, AOL and the guy who installed Kazaa on her computer, saying they were all complicit in getting her to share copyrighted content, without warning her of the consequences. This is an incredibly weak argument that hasn't gotten very far in the past. This lawsuit just makes it look like she doesn't want to take responsibility for her own actions.

Filed Under: kazaa, liability, music, riaa, santangelo
Companies: aol, kazaa, riaa