AOL Turnaround Update: Busy Fixing Email (Good), Rolling Out Seed

We held a call with two AOL executives to get an early read on how the turnaround is going. 

Specifically, we spoke with Bill Wilson, Head of the company’s editorial arm MediaGlow, and Brad Garlinghouse, Head of Communications.  Based on the call, AOL appears to be making progress in two critical areas: Upgrading its email platform and rolling out a new content management system.

In the past few weeks, AOL has:

  • Launched a new UI for email with 65% less ads
  • Streamlined its CMS to ensure a more efficient editorial process and drive more targeted content.
  • Added quality freelancers to its Seed.com service to drive the production of quality content.

SERIOUS WORK NEEDED TO TURN AROUND EMAIL

AOL Mail is critical to the turnaround.  If AOL cannot stop users from leaving its email service, the turnaround of its media business will be even more difficult, as AOL’s media properties receive a lot of referral traffic from email users. 

The good news is that management confirmed only 1/4 of its active email users are paid subscribers, with the remaining 3/4 using the free service.  That means that the company has the opportunity to retain most of those users if it is able to improve its email product.

This is not an easy task, but the first step toward doing it is to make the email product easier to use and less cluttered.  Wilson and Garlinghouse said they launched a new UI for email last week that made the experience easier for users and got rid of 65% of the ads on the email pages.  This could pinch profits in the near-term, but the ad losses should be small, as email inventory is fairly low-quality.  Less clutter, meanwhile, should help retain users and could help drive email users to more premium pages on the AOL network.

Finally, management said there are upcoming “exciting announcements” related to AOL’s instant messaging service, AIM.  AIM’s influence has waned in recent years, but it is still a very valuable asset that the company has never really done anything with.  It will be interesting to see what these “announcements” are.

Bottom line: It will take a lot more heavy lifting to stop AOL’s email declines, but AOL understands this and is taking the right initial steps.

NEW CONTENT STRATEGY IS ABOUT EFFICIENT TARGETING, NOT MASS PRODUCTION

There have been many concerns that AOL’s freelance content strategy will clog its pages with low-quality content that will hurt its brand, ability to sell premium advertising, and its bottom line.  Bill Wilson explains the strategy as being less about mass production than about about simply streamlining AOL’s editorial process.  This in turn should:

  • Create more popular content that can be published quicker.
  • Sell more premium ad inventory as agencies seek to place brands next to fresh, relevant content.

For example, before AOL consolidated its content-management-system (CMS) under its Seed.com plaform, the company’s editorial staff needed to access a separate CMS’ for each type of content – video, text, data, and even analytics.  All of this has now been housed under a single CMS, which should enable editors to identify optimal content quickly from a central location and publish it in a timely manner.

In addition, Wilson said the underlying strategy is not to reach as many freelancers as possible through Seed.com, but to manage a large network of quality freelancers and feed them assignments based on search and surfing data on the AOL network – assignments readers have said they want to hear about. This in turn should enable the company to sell more premium advertising since its content will be fresher and more relevant. 

For example, before Seed.com was launched, freelancers submitted articles in many cases via fax and were paid by check through the mail.  With over 3000 freelancers that is a very cumbersome process that made it difficult for AOL editors to react quickly to stories needing immediate coverage.  Under the current system, articles are directly uploaded into the CMS and payments are made via direct deposit. 

SEED.COM LAUNCH APPEARS TO BE MEETING ITS INITIAL GOALS

Management was careful to state that the new content platform, Seed.com, is not finished and would continue to be developed.  However, management believes the project is on track.

We could not get any hard numbers on the number of new freelancers or the amount of incremental content received since Seed launched, but management is pleased with the quality of freelancers who were signing up.  Most of these were through word-of-mouth, though the company does plan on fully marketing the service beginning in the first half of 2010.

MORE:

Goldman Doesn’t Hate AOL, Sony’s Latest Futile Attempt To Attack Kindle, Google Buying Yelp

We Test-Drive AOL’s McContent Platform, Seed.com… And It Looks Good!

AOL’s New Robo-Content Strategy Is Actually Smart

It’s AOL’s Email Collapse Investors Should Be Worried About, Not Just Subscriber Declines

What AOL Isn’t Telling Investors

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