AOL has “stemmed the tide”

September 20th, 2007 • Business, Internet
Tags: aol, web

Some months ago now, AOL stepped out from behind its walled garden - the once subscriber-only service realised that there was a big bad world out there, which just happened to have more money than the garden in which they sat.Has it worked? According to AOL’s CEO in an update to Wall St. today, the answer is yes - ish. The headline quote from Ron Grant says it all: ‘We have stemmed the tide of people leaving us.”He also pointed to the company spending $650m in the next year on ‘internal developments’, and a spend of over $500m on acquisitions. He also says that AOL ‘gets the new web’ (pointing to the fact that you can now get your AOL email through an iGoogle page). I hope so: I’d like AOL to succeed - not least because the major players are, in reality, few in number.But the New York Times has its doubts over AOL’s future as a portal…

In a world of search, social networks and other forms of browsing, portals don’t serve the same function they once did. (See this quick take on Google’s approach to portals.) If you look at the breakdown of the traffic on Yahoo or AOL, you’ll see that by far the largest number of page views is on their e-mail services. The various content sections, news, movies and so on, are still huge but they are losing share of mind to smaller sites.