March 10, 2010
By Kristen Schweizer March 10 (Bloomberg) — AOL Inc. said it’s “laser focused” on getting a share of an estimated $20 billion gap in online advertising, as marketers race to catch up with consumers on the Internet. “Consumers have shifted faster than ad dollars,” Tim Armstrong , chief executive officer of the Internet company spun off from Time Warner Inc. , said in an interview today. “We’re building programs with both technology and design for advertising that are focused at closing that gap.” The company currently gets about 50 percent of revenue from ads and is “significantly” boosting sales staff, he said. AOL’s acquisitions strategy is focused on purchasing “technology tuck-ins” to help AOL build its platforms, Armstrong said in the interview in Abu Dhabi. It’s also targeting video and mobile-phone content and is hiring journalists to create quality content, Armstrong said. AOL, which runs MapQuest, PoliticsDaily and Lemondrop.com, will take a total charge of between $150 million and $200 million for a current program of job cuts and office closures, Armstrong said. AOL plans to re-enter some of the international markets it left in 2011 and 2012, he said. AOL , spun off last year, is cutting about a third of its workforce and halving its international offices to leave 20, Armstrong said. The New York-based company gets about 25 percent of revenue overseas, he said. Some international offices were very unprofitable and made acquisitions that didn’t fit with AOL’s strategy, he said. Asset Disposals “Each country had its own platform and even its own country strategy,” Armstrong said. “We’ve gone through and pulled back. We’ll scale the technology based on AOL ’s new business models, which will be customized locally, and we’ll structure hiring that will match our business strategy.” “International is a very critical part of AOL’s future and we’re pulling back to get our plumbing straightened out. We’ll come back with a content platform we believe works globally.” AOL plans to dispose of more assets in 2010, Armstrong said. He declined to say which companies may be sold. AOL last month said fourth-quarter net income was $1.4 million, compared with a loss of $1.96 billion a year earlier, when Time Warner wrote down the value of its Internet property. Revenue dropped 17 percent to $809.7 million. Time Warner spun off AOL in December, nine years after a $124 billion combination that triggered record losses . To contact the reporter on this story: Kristen Schweizer at kschweizer1@bloomberg.net
Read the full article →
January 22, 2010
By Kelly Riddell Jan. 22 (Bloomberg) — Charter Communications Inc. , the U.S. cable operator that emerged from bankruptcy protection in November, said Chief Executive Officer Neil Smit resigned to take a position at larger rival Comcast Corp. Smit’s resignation is effective Feb. 28 and he will be temporarily replaced by Chief Operating Officer Mike Lovett while Charter searches for a CEO, according to a statement from the St. Louis-based company today. Smit will join Comcast , the largest U.S. cable operator, as president of cable communications, reporting to COO Stephen Burke . Charter, the No. 4 cable operator, won approval of its bankruptcy plan in November and plans to relist on the Nasdaq this year. It filed for Chapter 11 protection in March after being overwhelmed by more than $21 billion in debt . The company, which has reported a loss every year since going public in 1999, amassed the debt through acquisitions and the addition of services to compete with larger rivals. Smit took the helm of Charter in 2005 when the company had already racked up $19.2 billion in debt and was losing customers to competitors who offered bundled telephone, cable and Internet services. Smit helped boost Charter’s average revenue per video customer to $115.26 in the quarter ended Sept. 30 from $73.94 when he took office, driven by rising sales of bundled services. Before serving at Charter, Smit was president of Time Warner Inc.’s America Online Access Business overseeing Internet access services. Comcast, based in Philadelphia, fell 52 cents to $16 yesterday in Nasdaq Stock Market trading. The stock was little changed last year. To contact the reporters on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net
Read the full article →
