AOL just announced a major shake up of its content business, outsourcing the production of content for three important properties.
AOL’s sports section, Fanhouse, will be working with the Sporting News. The Sporting News will tackle much of the daily grind of sports, while AOL’s Fanhouse will still handle much of the opinion type pieces.
AOL’s health section will get content from Everyday Health. AOL’s real estate section will get content from Move.com.
While AOL has been trying to turn itself into a destination for premium content, today’s announcement signals a shift towards being a portal, getting content from elsewhere.
When we asked CEO Tim Armstrong if it was a shift in strategy he said, “The strategy hasn’t changed.” He added, “With the content deals we’re doing today, what it allows us to do is continue to invest in other brands.”
Why is AOL outsourcing sports? On the call, Armstrong said unless you’re a top 2 or 3 property it’s hard to sell ads. (The Sporting News will be handling ad sales for AOL.)
For more analysis, don’t miss: In Big Strategic Shift, AOL Blows Up “Fanhouse” And Other Towns And Outsources Content To Third Parties
Original: A curious email from AOL just hit our inbox inviting us to listen to a conference call from Tim Armstrong.
We’ll live blog it here, and let you know what’s up.
Click here for the latest, or just refresh your browser.
4:30: Waiting … we’re hearing this has something to do with AOL’s sports site fanhouse. Guess we’ll find out soon enough.
4:32: Just music still …
4:37: In case you’re curious, all we got in the email was, “Please join Tim Armstrong for a quick call today at 4:30pm”
4:38: Here we go! Tim is on: thanks for joining — you’ll get a release shortly that will detail all this, but I just wanted to do a walk through.
4:39 As we enter 2011, a clear strategy of turning the company around and having magical experiences for consumers. Today’s deal allows us to continue that focus.
4:40: Three deals in the content space. Three partnerships, we’re estatic. First partnership is with the Sporting News. Sporting News will be covering major sports for us at AOL. Fanhouse brand will remain in existence and will be used by Sporting News. Partnership being worked on for months.
4:41: Second partnership is Everyday Health. Best partner in the health space. I think if you look at what they have been good at, it’s been health and wellness. Very community focused. We’ve been meeting with them for the last few months, looking forward to growing partnership.
4:42: Next is with Move.com, the leading online real estate company. Move has one of the most incredible databases on the internet, getting access is something we’re interested in.
4:43: At a macro – level, we did these deals because we’re focused what we’re focused on. We have chosen these partners because they are going to be better at doing their core business. It will reduce overall expense.
4:44: On AOL side, we can double down on areas we can win in. We’ve also been focused on local and video. We want to work with these partners on this. We signed these agreements to be great partners.
4:45: There is a group of people that could be affected is the fanhouse group. Sporting News is ramping up their business which is attractive. Don’t know impact on Sporting News. We’ll determine what it is …
4:46: Building out our content business. Questions now:
What is the cost savings? A couple dozen jobs lost at a high end.
Transition from AOL health to everyday health. Way to think about this, place where core offering is in the audience. Fanhouse moves into being Sporting News. We keep AOL Real Estate.
Won’t be massive reduction in number of sites.
Impact on advertising? On Health site … we have a number of partners and ads, those will continue. There will be more traffic for them to monetise. We tend to have a lot of health and CPG outside health, so we’ll retain that.
On sports, we don’t have a lot of endemic ads. Sporting News will sell the advertising on AOL.
On real estate, we’ll both sell, but we’ll sell different things. Move.com will be endemic listings seller.
4:53: What is the ballpark revenue for those areas? Won’t comment.
4:54: We have broken in town type of properties. We’re focused on these towns. We’re going to increase the focus on that. Will we do this in other areas? Nothing imminent. We’re focused on profitability, where we’re strong, places we can win.
4:57: My job is to turn around AOL, to make it successful. I am very happy with focus and improving content. Even in these areas we announced these deals, we’re still making content in these areas. We’re not getting out of these spaces, but still producing content in these areas. Not sure, if there will be more deals like this.
4:58: Question about revenue split … Tim: we are looking at the users. That’s number one. Number two, partnerships are based on our ability to offer partners traffic. Both will make money doing it.
5:00: Strategy hasn’t changed. With the content deals we’re doing today, what it allows us to do is continue to invest in other brands. Everything we’ve said public. More content brands, continue to build AOL into a branded content company. The focus on Fanhouse … Fanhouse not going away. Staffing with sporting news. Brand and bunch of staffing will be staying around. AOL strategy not going away. Underneath that, so you’re very very clear, we’re still producing content in these verticals. Fanhouse not going away. When we produce content it will be local and video. AOL has been basically very strong in selling ads.
Those areas 80 80 80 which is women, 80% domestic spending, 80% local, mapquest/patch, 80% which is Engadget or music properties or things that have an endemic audience.
Sports is a very strong category, if you’re top 2 or 3 categories, triple underline Fanhouse isn’t going away, sporting news selling against sporting news content on AOL. They’re getting out of sports, that’s not true.
5:05: We have a better chance to partner with Sporting News. In partnerships in these areas, we think 1+1 = 3.
5:06: Wrapping … We’re happy about these partnerships. Outcome for us this is a win for us. We think we’re going to be a great partnership company. We are going to be working with AOL employees on Fanhouse, you have my personal word on that. Overall great start to the year. Thanks for dialling in to the call.
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