AOL Automates Advertising, Consolidates Joystiq and TUAW
AOL is putting its long planned changes into action by restructuring its advertising sales staff to divert the company towards its more promising businesses.
This means bad news for the employees. Reportedly, 150 people from the sales department are to be laid off. Moreover, AOL is also integrating some of its websites: Joystiq and Apple’s news site TUAW are both being consolidated into Engadget, and AOL Autos has already been folded into Autoblog.
However, it does not mark the end of blogs. Joystiq will stay on as a separate channel at Engadget, while TUAW content will be folded into the bigger site.
About the sales reorganization, AOL is going digital. It is shifting into programmatic advertising, which means a heavier investment in technology and less emphasis on sales people.
This news is coming ahead of AOL’s announcement of its Q4 earnings on February 11. However, the restructuring is not a surprise as CEO Tim Armstrong had hinted of changes in statements made during its last earnings in November 2014.
“As we look out to 2015, our strategy and decisions will be driven by the following organizing principles,” said Armstrong. “Number one, we’ll focus our capital allocation resource management and management time against scaled assets and platforms. Two, we will organize our asset portfolio around scaled value and scaled growth assets. Three, we’ll simplify everything that can be simplified.”
He then explained ways on how he planned to implement that, saying that the company will look for “an increase in the value and growth of our global content brands by simplifying the portfolio of brands and increasing our share of video and mobile in key content areas.”
Even though TUAW and Joystiq are both reputed in the techie world, their traffic has been dwindling lately. Armstrong’s statements in November point to AOL looking to cut out costs (people and unprofitable operations) as it pushes ahead to make the revenue drivers into more solid businesses.
In Q3 of 2014, AOL made $454.5 million from advertising revenues, which managed to account for about 73% of its $626.8 million of the quarterly revenues. However, the company has not been gaining profit from its advertising business, but by its subscriptions revenues (dial-up business and other paid services). The Membership Group posted adjusted operating income of $139.2 million, while Platforms posted an adjusted operating loss of $600,000, and the Brand group had adjusted operating income of $17 million.
Note: Joystiq’s employees are looking for jobs now. If any reader can help, here is the list of laid off employees.