In the past few years, AOL’s reorganizations and staff cuts have been driven by internal issues. This time, it’s the economy, *AOL* CEO Rand…
Jobs on Apple TV: Still a “Hobby;” during earnings call Apple CEO says the whole digital living room category is still a hobby, and given current economic conditions, will remain so in 2009. (Zatz Not Funny)
CBS and Saturn Partner for Web Series; Daphne Zuniga stars in eight-part Novel Adventures, where the characters do activities inspired by classic books. (The Hollywood Reporter)
Film Company Gigantic to Sell Movies Online; movies will retail for $3 the same day they come out in theaters. (Variety)
AT&T U-verse Still Going Strong; telco TV service added 232,000 subs in most recent quarter for a total of 781,000; will it reach the 1 million-mark by the end of the year? (GigaOM)
Comcast Laying Off 300; cuts to hit eastern division as part of an overall restructuring and division consolidation. (Multichannel News)
Animoto Launches Service for Pro Photographers; lets users create videos from photos for DVD burning or online distribution. (Animoto)
AOL has finally gulped Bebo and formed what it calls People Networks. AOL bought Bebo earlier this year for a heart stopping $850 million. The group will be run by Joanna Sheilds, formerly of Bebo. David Liu was working on the AIM, ICQ, Goowy and Yedda teams is joining the People Network. I have met him on a few occasions – smart guy. You can find more details in Randy Falco, AOL CEO’s memo below the fold. Also, check out this Financial Times article that points to Yahoo possibly lose the ad deal. No surprise, but timing is clearly not good.
But despite drawing large, engaged audiences, other social networks have not been able to make the experiences relevant to users and marketers alike.
That right there is the reason I’m hostile to most social networking and social networking-related startups that plan to rely on advertising: They’re depending on marketers to foot the bill while at the same tailoring their content to users that are generally hostile to or uninterested in marketing.
Falco believes that AOL’s future combination of Bebo and Platform A will solve this problem. He’s wrong. Buying more companies with cooler widgets or more users isn’t the direction the Internet is heading. We no longer need portals because we now can navigate the web for ourselves. The real opportunity for a startup in social media is making social networks relevant for advertisers — and making advertisers see social networks as an essential forum for their messages.
It might start with a technological solution, such as the one from startup ScanScount, which is trying to isolate relevant content so advertisers feel comfortable placing their brand on social and user-generated media sites, but it won’t end there. These sites, no matter how useful, need to make money. The company that figures out how to do that will be the Google of Web 2.0.
Kara Swisher got her hands on a memo sent out to AOL (TWX) employees earlier today from CEO Randy Falco. Here is a summary of what it says:
* The focus is advertising and the new venture, Platform-A.
* New web-based properties, including super-hot TMZ.com, are the focus; he calls it the “publishing business.”
* Not giving up on Access business just yet because it “continues to be profitable, providing us cash flow to invest in other areas of the business.”
* They will cut 2,000 employees, roughly 20 percent of their total work force.
Put simply, my vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.
Clearly a Black Monday out in AOL-land, and since I have a lot of friends who work there, this is not an easy bit of news to report. Still, AOL needs to do some housecleaning in order to streamline its operations. I wonder, though, despite all the talk about being able to compete in the advertising business, if AOL really has what it takes to duke it out with more motivated rivals like Microsoft (MSFT), Yahoo (YHOO) and of course, big daddy Google (GOOG).