In what seems to be almost recurring news, as far as Internet companies are concerned, Web 1.0 stalwart brand AOL (NYSE:AOL) announced that it is set for another round of layoffs. This time around the layoffs will involve its editorial staff. Noted content brands like Huffington Post and Engadget. If you have ever had doubts whether online content is really unprofitable, this latest piece of news should give you some clarity.
The hard challenges of making sustainable profit off online content
When it comes to making money online, it’s one thing to run a mom-and-pop blog and generate revenues through cost per acquisition (CPA) or pay per view (PPV) campaigns, it’s another thing entirely to plug an online property into a massive corporate bureaucracy. A lot of the nimbleness and community responsiveness is lost. Apparently, this is precisely the kind of challenges AOL has been having a tough time finding solutions for. AOL has announced rounds of layoffs related to its Patch division last year. Now, the layoffs involves its different content brands.
The good news, if you want to call it that, is that the layoffs will not be on a ‘mass scale basis.’ Thank goodness for small miracles. Still, this latest piece of bad news should act as a reminder to AOL shareholders of the difficulty of transforming AOL from an old guard ISP to a contemporary content brand. There’s more to running a lean, mean, profitable online content outfit than simply scooping up the Net’s biggest content brands. Online brands become online brands because of the community that develops around content. The focus should not just be on retaining brands but scaling up their communities to fit the overall corporate identity that owns the brands. Otherwise, solid online content brands can only look forward to deaths by a thousand cuts. AOL’s CEO Tim Armstrong should zero in on this fact while there’s still time for AOL. Seriously.