Change Has Come To AOL’s Silicon Valley Product Factory, And Here Come The Howls

AOL Palo Alto
AOL’s Palo Alto office

[credit provider=”Matt Rosoff”]

AOL is changing the way it develops products in Silicon Valley, and some of the people there aren’t happy about it. Two years ago, AOL CEO Tim Armstrong hired the guy who saved Yahoo email, Brad Garlinghouse, and told him to go forth and create new products.

Armstrong even called Garlinghouse AOL’s “CEO of Silicon Valley.”

Then AOL went out and acquired a bunch of startups – including and Things Lab –  many of them for the product talent.

The company opened a some of its Palo Alto office space open to small startups and students, hoping they would provide an atmosphere of innovation.   The office launched a new version of AOL Mail and a news aggregator app for iPads called Editions.

One AOLer in the Silicon Valley office describes the era as exciting and hopeful.

“It seemed to me a once in a life time chance to do something impossible,” he told us over the phone. “We were building some great stuff.”

He says times have changed. 

First, AOL bought the Huffington Post in spring 2010. After the integration in the summer, it quickly became clear that Huffington Post’s engineers and product managers would be in charge of any products related to AOL’s media properties. That gave AOL’s west coast office a lot less work to do. 

Then, in the fall, Garlinghouse left the company.

Our source inside AOL’s Silicon Valley’s office says all the changes have left the place feeling directionless. 

“I don’t feel like they’re making decisions. What is their plan out here?”

He says AOL had a rare “toe-hold” in Silicon Valley, but that now it is “letting it fizzle.”

Soon, our source predicts, talent will start leaving. This source specifically worried that David Temkin, the guy in charge of AOL’s mobile products, will soon become a vulnerable target for poachers.

A source familiar with upper management’s view of AOL’s product strategy says the changes going on in AOL’s Palo Alto office have more to do with increased accountability, rather than an actual change in strategy.

This source says that during Garlinghouse’s tenure, the office launched a number of products that failed to deliver on the only two metrics that matter for AOL: traffic or revenue.

“Innovation is not being tossed aside, but there has to be accountability,” says this source.

“There is a prioritization going on and some people are not happy with it.”