AOL's Falco: Yes, We Might Merge With Yahoo; No, I Can't Say How Many Of You Will Be Fired

AOL CEO Randy Falco (TWX) sets employees at ease about that distracting AOL-Microsoft-Yahoo-News Corp chatter. (YHOO) (MSFT). No comment yet on how many thousands of AOLers will be fired if the Yahoo merger goes through.

Dear AOL colleagues,

I’m sure you’ve read some of the recent news speculating about potential AOL partnerships. While the company can’t comment on any discussions at this time, I’d like to provide some perspective on the industry and AOL’s position in the market.

It’s clear that the industry is in a state of extreme flux. Each day brings new rumoured combinations of companies. But what’s not surprising is AOL’s appeal in this rapidly changing environment. The market is recognising the value of what we’ve built together over the past year and a half, as we’ve shifted from a subscription model to an advertising-supported business. It’s a remarkable transition that is gaining momentum with each passing week. Our focus on capturing growth in three key areas – publishing, advertising and social media – is beginning to pay off.

In publishing – which includes Programming, Products and Platforms – our focus has been on growing audience size and engagement. The results have been very encouraging. In February, AOL had its fifth consecutive month of growth, with page views up 16% over the same period in 2007. Thirteen of AOL’s content sites – such as Music, Television, News, Money & Finance and Celebrity – rank in the top 5 in their respective areas. Our rejuvenated Programming and Products appeal to people who now roam widely for what they want on the Web and align more closely with the kinds of passionate audiences marketers need to reach. The result is that AOL is now attracting a younger, more engaged and more valuable audience than ever before.

In advertising, we’re focused on building the most effective and efficient marketplace for buying and selling digital advertising. Platform-A combines some of the strongest assets in the digital advertising business into a unified solution for marketers to build their brands and publishers to monetise their content. By integrating the reach of with the relevance of our industry-leading targeting technologies and the richness of AOL’s content network, Platform-A will connect marketers to their audiences with engagement, efficiency and ease. Delivering on this means we need to move even more quickly to integrate the Platform-A companies into a seamless organisation. In the three weeks since her appointment, Lynda Clarizio has moved quickly to announce the formation of one aligned sales organisation that will have the ability to sell advertising solutions across Platform-A, supported by vertical teams focused on our content areas and product teams focused on selling individual products. To make it easier for advertisers and agencies to work with us, we now will be offering the ability to buy media across Platform-A with one contact and through one sales force.

In the social media area, we’re focused on empowering a truly social Web with programming and tools that help connect people, cultures and lifestyles around the world. Bebo, together with AIM and ICQ, will create a social media network reaching 80 million people worldwide. This is a young and fast-growing market with huge potential. But despite drawing large, engaged audiences, other social networks have not been able to make the experiences relevant to users and marketers alike. Our opportunity involves integrating social media with our publishing and advertising networks to create more relevant content for the Web audience and more relevant marketing for advertisers. While the Bebo deal hasn’t closed yet, I’m looking forward to sharing more about the many opportunities I believe exist for Bebo in combination with some of AOL’s most exciting assets.

Our collective rebuild of AOL over the past year and a half has positioned the company to prosper in this dynamic market. We know that strong, profitable companies have more control over their own fate. We still have more work to do toward this end. So I want to ask you today to stay focused on the work at hand: continuing our transformation of AOL into a global advertising-supported Web business.


See Also:
Microsoft-News Corp-Yahoo? We Hate It
Jerry Strikes Back: AOL-Yahoo in Advanced Merger Talks


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