“There is no deal on the table, no proposed deal, and both parties are on retainer with us and we work with them. Our strategy hasn’t changed and we are moving faster than ever on it.” Thus spoke AOL Chief Tim Armstrong when questioned by Adweek after retaining two of the biggest names in M&A, law firm Wachtell, Lipton, Rosen & Katz and investment banking company Allen & Company LLC.
He was reacting to the Adweek speculation that AOL was itself looking out for a buyer.
Tim Armstrong could be right. He has continuously chopped and changed the strategy and partners at AOL pruning some business while acquiring others since his eventful entry at AOL and retaining the two M&A heavyweights could be just to facilitate the churnings.
Over the last two years AOL has snapped up over half a dozen companies including at least two top of the line technology blogs TechCrunch and Engadget besides the local media reporting company Patch. In February Armstrong was talked into a sugar coated deal for Huffington Post that included a cash payout of $300 million and a stake of $15 million in equity.
The new media’s trophy princess Arianna Huffington came to AOL with the deal as the Chief Spokesman and as expected the viewership has looked up ever since. However the revenue jump has not been enough to justify the expensive all cash acquisition, and investors have given a thumbs down to the deal.
AOL’s share price which had begun inching upwards late last year, slid continuously after the acquisition of Huffington post and is now down by 40% since February. This was largely because the company was unable to get premium advertisement rates despite the high numbers of page views that Huffington Post brought about largely due to the stranglehold Google has in the online ad market.
As a result investor confidence has been down and in July AOL sacked its advertising chief Jeff Levick and kicked upstairs the President of its arm Advertising.com Ned Brody who became the Chief revenue officer allowing AOL to bring in fresh faces.
Whereas AOL does need some tie up to one of the cash flush big brothers Google, Apple or Microsoft who are acquiring with a gusto, it does not need to throw away Armstrong’s finely crafted strategy of transforming AOL to a prime media company.
Perhaps it should begin talks with Google which had offered to take up 5% stake in AOL in 2005, considering that Nancy Peretsman who had brokered the deal then is back to advising AOL as Managing Director of Allen & Co.
By: Sandip Sen
He was reacting to the Adweek speculation that AOL was itself looking out for a buyer.
Tim Armstrong could be right. He has continuously chopped and changed the strategy and partners at AOL pruning some business while acquiring others since his eventful entry at AOL and retaining the two M&A heavyweights could be just to facilitate the churnings.
Over the last two years AOL has snapped up over half a dozen companies including at least two top of the line technology blogs TechCrunch and Engadget besides the local media reporting company Patch. In February Armstrong was talked into a sugar coated deal for Huffington Post that included a cash payout of $300 million and a stake of $15 million in equity.
The new media’s trophy princess Arianna Huffington came to AOL with the deal as the Chief Spokesman and as expected the viewership has looked up ever since. However the revenue jump has not been enough to justify the expensive all cash acquisition, and investors have given a thumbs down to the deal.
AOL’s share price which had begun inching upwards late last year, slid continuously after the acquisition of Huffington post and is now down by 40% since February. This was largely because the company was unable to get premium advertisement rates despite the high numbers of page views that Huffington Post brought about largely due to the stranglehold Google has in the online ad market.
As a result investor confidence has been down and in July AOL sacked its advertising chief Jeff Levick and kicked upstairs the President of its arm Advertising.com Ned Brody who became the Chief revenue officer allowing AOL to bring in fresh faces.
Whereas AOL does need some tie up to one of the cash flush big brothers Google, Apple or Microsoft who are acquiring with a gusto, it does not need to throw away Armstrong’s finely crafted strategy of transforming AOL to a prime media company.
Perhaps it should begin talks with Google which had offered to take up 5% stake in AOL in 2005, considering that Nancy Peretsman who had brokered the deal then is back to advising AOL as Managing Director of Allen & Co.
By: Sandip Sen
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