What Wall Street Thinks Of AOL And Tim Armstrong


The new AOL and Tim Armstrong held their coming out party for Wall Street in New York yesterday, in a vast roadshow luncheon at the St. Regis.

What did Wall Street think?

Some observations from attendees:

  • “I was prepared to hate this guy Armstrong–just another dick from Google.  But he came across real well.”
  • “Tim Armstrong’s an impressive guy.  The CFO’s an impressive guy.”
  • They’re all new.  Of the top 6 guys it seems like only 1-2 are from AOL.”
  • “Opening statement: Very confident this will eventually be a growth business.  But realistic.  Admitted that the maths is daunting.  The two highest margin businesses, access and search, are shrinking.  He said the new search deal [in 2010] ‘won’t look like the last one.’  That’s spin for saying the new search deal will probably be worth about $500 million a year instead of the current $680 million.”
  • “Two-thirds of the people in the room were value guys hoping they’d say they’re going to run off the access business for cash.  They’re obviously not going to do that.”  [TRANSLATION: Many of the investors in the room just want AOL to admit it’s doomed and collect as much cash as possible before going bust.]
  • “They were obviously not interested in getting people excited about the AOL story.  If they’d wanted to get people excited about buying the stock, they could have told a much more exciting story.  They were VERY low key.   They’re just setting a low bar so they can get their options struck at a really low price.”  [MORE CHARITABLY: They understand the benefits of underpromising and overdelivering].
  • “He talked a lot about structured data.  That flew right over my head.  What the hell’s structured data?  Is that that Patch thing?”
  • “They said the turnaround will take 2-4 years.  He said he don’t expect the turnaround to take one year.  But he also said ‘We didn’t come here for 5 years.'”
  • “Armstrong said the Wall Street Journal got the whole content strategy story wrong.  It’s not ‘Robo-content.’  It’s a system that enables human editors and freelancers.”
  • “He said when he got there they had 24 ad serving systems and 17 content systems… The main message: Baboons built all this crap.   But now the humans have arrived.”

That’s about as good a reaction as one could hope for.  Well done, Tim!

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