All of them, including a major restructuring of AOL’s “Fanhouse” sports site, suggest that the company is abandoning its proprietary content production strategy in several verticals and basically becoming a portal again.
Here’s how Terry Lefton of Sports Business Daily describes the deal:
Sports content for AOL has been under its internally developed Fanhouse brand for the past two years. Starting in March, Sporting News will provide and develop a majority of the content for the site from its current staff based in Charlotte. Sporting News will licence the Fanhouse brand from AOL and use it as a home for the site’s “voice,” or its columnists. Sporting News is expected to add a handful of top columnists from AOL, but sources said a number of AOL Sports editorial staffers have already been seeking jobs at other sports sites. It was unclear if any AOL Sports management will join Sporting News.
Translation: AOL is handing over one of its most successful premium content sites, Fanhouse, to a third party, and releasing many of its employees in the process. This move comes shortly after AOL hired many expensive columnists to work for Fanhouse.
Sporting News will presumably be paying AOL a lot to licence Fanhouse and get traffic from AOL. Meanwhile, AOL will save a bunch of money by not paying expensive content creators. So this move will obviously improve AOL’s bottom line, at least in the short-term.
AOL is making similar moves in “Health” and “Real-Estate.”
In simple terms, AOL appears to be reverting to the “portal” strategy that originally made it and Yahoo and other portals massive sites back in the days before Google, blogs, and social media. Of course, now that we have Google, blogs, and social media, it’s not clear that portals are needed anymore.
AOL’s Tim Armstrong explained that these moves will allow AOL to focus on what it’s best at, which at least for now, appears to include premium content in some other verticals (tech, for example, where the company owns Engadget and TechCrunch, which are in the middle of a civil war).
And that’s fair. It’s hard to boil the ocean and be great in everything.
But this is yet another major strategic change for a company that never seems to be done with them. And we, at least, are not convinced that AOL will be able to differentiate its “portal” enough to remain a powerhouse of distribution.