Photo: The Consumerist
AOL CFO Artie Minson and CEO Tim Armstrong keep telling analysts there will be no Bebo-esque, “hail mary” acquisitions in the company’s near future.Now we know the real reason why: AOL’s creditors won’t allow it.
Today at the Credit Suisse conference in Florida, Artie told the audience “our current credit agreement caps us at a $100 million deals. We’re out of the Hail Mary business.”
Artie said AOL will still buy other companies, but that such mergers will have to fit the mould AOL (AOL) set with its StudioNow acquisition earlier this year.
That is, AOL wants companies that help it solve technological problems inherent to AOL’s in-place strategy. Execs at acquired companies should be ready to be slotted into big roles at AOL, too.
StudioNow, a platform for video freelancers, helps AOL scale its content strategy. Former StudioNow CEO David Mason will become senior vice president of AOL Content Platform.
One company that almost fits this bill is Associated Content, which works the way AOL’s site-for-freelancers, Seed.com, is supposed to work, but doesn’t, because it doesn’t have a real tech backend yet. AC CEO Patrick Keane is an old lieutenant of Tim Armstrong’s so he’d probably fit in well at AOL too.
The problem is, AC might cost more than the $100 million AOL’s creditors have OK’d.
Too bad for AOL and too bad Tim Armstrong, who happens to be an Associated Content investor.
(Not that Tim isn’t trying. AOL actually tried to buy Associated Content last fall, but like AOL’s creditors now, then parent-company Time Warner said no.)
Another reason Patrick Keane would fit in at AOL? He’s an ex-Googler and there are a ton of those at AOL.