Earlier today, Valueclick (VCLK) warned that results for the second quarter as well as the rest of the year will be below previous expectations, putting at least part of the blame on a slowdown in online display advertising. That raises some serious questions for other companies with significant exposure to online display ads, in particular Yahoo (YHOO) and Time Warner’s (TWX) AOL unit.
At a meeting with about a dozen senior members of AOL’s staff Monday, Jeff Bewkes left at least one member of management with the impression that the company is for sale, a source close to the company says. Another person who attended the same meeting says Jeff did not say specifically that the company is for sale but merely said that “everyone is talking to everyone” and that AOL might someday be sold.
If you read this blog, you might think that Kara Swisher isn’t a big fan of fun. Or at least of silly, fun apps like SuperPoke! and what we call “social entertainment.” Call me silly, but I’d take entertainment over utility any time, and you know what? I bet you would too.
One thing’s for certain: The collapse of the Yahoo-Microsoft deal could be the best thing to happen to Time Warner’s Jeff Bewkes for a good long time.
Yahoo reportedly has a deal teed up to buy AOL for about $10 billion. We suspect that the newly dumped Microsoft may have something to say about that.
AOL wouldn’t give Microsoft what Yahoo would have, but it would help the company strengthen its Web-based communication business (AIM, AOL Mail, etc.). MapQuest could be a nice fit with Microsoft’s mapping products.
There was good news for Apple and Comcast, but bad news for Blockbuster woven into Time Warner’s conference call with investors today. Jeff Bewkes, Time Warner’s chief executive, said that the company’s Warner Brothers studio will now release movies for video-on-demand systems on the same day they are released as DVDs.
Long-suffering AOL may be worth more than some investors think. Last fall, UBS analyst Mark Morris pegged the value of Time Warner’s AOL unit at $13 billion, a mere 2.5 times revenue. That pessimistic view reflects AOL’s declining revenue, which fell 33% last year to $5.2 billion.
A lot has changed during the last few months. Oh, AOL’s revenue still is on the decline. But Microsoft’s offer to buy Yahoo for $42 billion has pressured its rivals. That bid, currently worth about six times Yahoo revenue, shows that even mature Internet companies have plenty of appeal to the right strategic buyer. And the pressure on Time Warner to sell AOL never has been greater. Its shares are trading at $14, down from $22 last year.
Back a year ago, I wrote a three-part series on the future of the media business. It began as an attempt to think out loud about a topic with which I had become obsessed, and it ended up becoming a manifesto of sorts about conversational media and marketing.
As you may recall, I started that last set of posts with the observation that major media companies–Time Warner, News Corp., CBS–had all fired or parted ways with the longtime managers of their digital assets, opting instead for insiders or traditional media folks with whom they were more comfortable.
AOL, the online division of Time Warner, is buying fast-growing social network Bebo for close to $850 million in cash, the company announced today. AOL is talking some gobbledygook about marrying AIM, ICQ with a real social network. Whatever!
To see what the future of Yahoo would look like under Microsoft, take a look at the news on AOL this week.
The once proud portal, which famously merged with Time Warner Inc. in the biggest deal of the dot-com era eight years ago, is limping toward yet another corporate restructuring, with sales down, layoffs coming, and thousands of former dial-up customers a day continuing to bail.
HBO will begin offering an all-you-can-eat buffet of its programming online to subscribers. But in an ironic twist, an HBO corporate sibling is ready to exercise portion control. Last week, Time Warner Cable disclosed its intent to experiment with a billing plan for high-speed data that charges customers based on how much bandwidth they consume. If such a model catches on in the U.S., it could have big implications for content companies trying to find traction online–like HBO.
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