Steve Case sez: Set AOL free

AOL founder Steve Case says it’s time to spin AOL out, again: “Any half-hearted move toward “liberating” AOL is no more likely to succeed than the half-hearted effort toward “integrating” AOL over the past six years. Given that Time Warner failed to capitalize on AOL’s potential during a period when it owned 100 percent of AOL, it seems doubtful that a scenario in which it has a lesser, but still controlling, stake will work better…AOL has spent the last six years wrestling with integration issues — it needs to be independent now so it can start to regain its leadership position.”
Steve says:
As a single unit, AOL could buy small companies, a la Yahoo and Google and compete
(Susan sez: As a conglomerate, hasn’t it continued to do that–with more than 8 acquisitions in the past 2 years?)
Steve says: As a free standing unit, AOL can better compete in the social network space against MySpace and Facebook.
Susan sez: And why do you think that? Given that many of AOL’s highly experience community staffers have been there more than 8 years, and that much of the moderation is now outsourced, what would AOL suddenly be empowered to do differently?
Steve says: The current effort to make AOL Portal #1 is a waste–portals are over and verticals are in.
Susan sez: I totally agree on this one, but don’t see how spin off would help it do this any better–unless Steve wants to come back and reinvent it.
Conclusion: I don’t agree with Case that spinning AOL out is a good idea–but my reasons have to do with the management–I just don’t believe that a stand-alone AOL would be any more nimble or able to act on the good ideas Case suggests. In this instance, it’s just too late–the baby has been thrown out with the bath water.
(Via The Washington Post)

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  1. Pseudonymous says:

    Interesting take Susan. I’m not sure I completely agree re: management.
    Care to comment more specifically? Which managers, or management structures, aren’t working?
    My opinion: companies that are protecting large single-source revenue streams get very conservative and slow-moving. AOL has taken a long time to get past the cultural dependence on the access business and is now capable of deciding to do bold things in the web space. Whether it can actually innovate and execute well remains to be seen.
    I wouldn’t expect to see it doing any “leap of faith” type ventures, though.

  2. susan mernit says:

    Very fair comment, P. There is no manager I would point a finger at–there are a lot of talented, hard-working and smart people at AOL–but I am hard pressed to see what would change if they became independent once again–the managers in place have been there 3-9 years on the whole, so what would independence gain if the same people who were in place earlier remain in place, which is what the Steve Case version would look like, IMHO.
    Your comment on AOL moving slowly as it tries to protect revenue has the ring of truth,but at the same time they went into this owning several other businesses,some of which they acquired at great expense and then disemboweled.
    And thanks for such a smart comment, come back, please.

  3. Dan Pacheco says:

    The other problem AOL has in the community space is, well, they’ve lost a lot of the people there who understand community. That’s not to say that they haven’t brought in new people wo can pick up the skills, but it’s a shame that they let so much fall through their grasp when they could have done it all.

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