Internet Portal Management Cases - Media

By pjain      Published May 26, 2021, 3:16 a.m. in blog Business-Management   

Portals and Media Dynamics

SNs grab Ad BM$ and Replaced Portals

Silicon Valley raced to create new digital platforms like Google replaced Yahoo. AOL was supplanted by cable giants. Netflix and Mobile Apple led up.

Mobile Apps TAKE over - not for on the go News and Content Access

AOL's content contributors consists of over 20,000 bloggers, including politicians, celebrities, academics, and policy experts, who contribute on a wide range of topics making news. In addition to mobile-optimized web experiences, AOL produces mobile applications for existing AOL properties

BRANDS - Portal Publishers - Free content Strategy

Yahoo and AOL became giant publishers instead.

  1. Yahoo Sports is a popular destination with sports fans,

  2. Yahoo Finance is a wealth of information for retail traders.

Mail and Internet Safety, Domains - Users unwilling to Pay!

AOL, Yahoo Mail did NOT Work vs Free and Good gMail and Corporate MS-Outlook

AOL Mail is AOL's proprietary email client. It is fully integrated with AIM and links to news headlines on AOL content sites.

Time Warner had used Microsoft's Exchange e-mail program before the merger. For all the problems of Microsoft, it is a solid IBM-like service provider a bit costly but has proven its presence in corporate use for 25+ years now!

After TW merger, nine mega divisions were expected to transition from AOL Mail only to Netscape 6.2 email. Netscape's e-mail application had been known as a good choice for reliable corporate e-mail. But this was buggy eg difficulties receiving and sending large attachments that held graphics or other data-intensive files. While such large media file problems were common to other programs as well like gMail and Outlook, they had integrated alternatives using Dropbox or similar file sharing systems to solve their problems.

AOL Plans

AOL Plans offers three online safety and assistance tools: ID protection, data security and a general online technical assistance service.

AOL Instant Messenger (AIM)

AIM was AOL's proprietary instant-messaging tool. It was released in 1997. It lost market share to competition in the instant messenger market such as Google Chat, Facebook Messenger, and Skype. On December 15, 2017, AOL discontinued AIM.

AIM by far leader - Why did it fail?

Chat Rooms and Communities

AOL used a system of volunteers to moderate its chat rooms, forums and user communities. The program dated back to AOL's early days, when it charged by the hour for access and one of its highest billing services was chat. AOL provided free access to community leaders in exchange for moderating the chat rooms, and this effectively made chat very cheap to operate, and more lucrative than AOL's other services of the era. There were 33,000 community leaders in 1996.

All community leaders received hours of training and underwent a probationary period. While most community leaders moderated chat rooms, some ran AOL communities and controlled their layout and design, with as much as 90% of AOL's content being created or overseen by community managers until 1996.

In order to return to profitability as telecom carriers started competing for end users with unlimited plans. AOL rapidly shifted its focus from content creation to advertising, resulting in less of a need to carefully moderate every forum and chat room to keep users willing to pay by the minute to remain connected.

After unlimited access, AOL considered scrapping the program entirely, but continued it with a reduced number of community leaders, with scaled-back roles in creating content. Although community leaders continued to receive free access, after 1996 they were motivated more by the prestige of the position and the access to moderator tools and restricted areas within AOL. By 1999, there were over 15,000 volunteers in the program.

In May 1999, two former volunteers filed a class-action lawsuit alleging AOL violated the Fair Labor Standards Act by treating volunteers like employees. Volunteers had to apply for the position, commit to working for at least three to four hours a week, fill out timecards and sign a non-disclosure agreement.

On July 22, AOL ended its youth corps, which consisted of 350 underage community leaders.[140] At this time, the United States Department of Labor began an investigation into the program, but it came to no conclusions about AOL's practices.

AOL ended its community leader program on June 8, 2005. The class action lawsuit dragged on for years, even after AOL ended the program and AOL declined as a major internet company. In 2010, AOL finally agreed to settle the lawsuit for $15 million.[145] The community leader program was found to be an example of co-production in a 2009 article in International Journal of Cultural Studies.[

Blight of Porn in Private Chat Rooms - Highly Profitable!

Too Early in Video Chat

It also included a video-chat service, AV by AIM.

Future of Ads/Brands - Content is King Strategy did not happen

“We’re building the future of brands.” - Armstrong, 2017 on Yahoo Acq

Blogs strategy seemed good for a while by AOL's Tim Armstrong.

AOL acquired a raft of early media brands, including the Huffington Post (now HuffPost), TechCrunch, Autoblog, Cambio and Engadget and products such as Alto, Pip, and Vivv.

Ad Tech does NOT work if Media is not compelling

AOL built up a global portfolio of media brands and advertising services across mobile, desktop, and TV. Services include brand integration and sponsorships through its in-house branded content arm, Partner Studio by AOL, as well as data and programmatic offerings through ad technology stack, ONE by AOL.

AOL acquired a number of businesses and technologies help to form ONE by AOL. These acquisitions included AdapTV in 2013 and Convertro, Precision Demand, and Vidible in 2014.

ONE by AOL is further broken down into ONE by AOL for Publishers (formerly Vidible, AOL On Network and Be On for Publishers) and ONE by AOL for Advertisers, each of which have several sub-platforms.

On September 10, 2018, AOL's parent company Oath after Yahoo acquisition consolidated Yahoo BrightRoll, One by AOL and Yahoo Gemini to 'simplify' adtech service by launching a single advertising proposition dubbed Oath Ad Platforms.

AOL/Yahoo had Ad Tech but no Magic Audience Attraction

AOL/Yahoo acquired several digital ad-tech companies to create a giant platform for advertising.


Yahoo Lessons

1990s Yahoo front page of the internet

Yahoo was the web service provider launched by Jerry Yang and David Filo in January 1994.

Yahoo was the directory cataloging the furious pace of new websites that sprang up in the late 1990s but needed curation and published by humans which represents a huge work.

Yahoo provided services like “Web portal, search engine Yahoo! Search, Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Finance, Yahoo! Groups, Yahoo! Answers, advertising, online mapping, video sharing, fantasy sports, etc.

Search Engines killed Yahoo's Directory

Yahoo was at its peak position before 1998 as in September 1998 Google was launched by Larry Page and Sergey Brin. Google is an internet-related service provider. Services like a search engine, online advertising technologies, cloud computing, etc.

Ironically, in 1998 Larry Page and Sergey Brin offered their revolutionary search engine algorithm (PageRank technology) to Yahoo for the amount of $1 million(derisory amount in today’s time) but yahoo failed to gauge its biggest competitor and refused to the offer. And the rest is history.

Rapidly, over time, Google search replaced need for a directory!

Yahoo Messed up Acquisitions - Diluted Stock Repeatedly, Writeoffs

Yahoo execs could NOT estimate real value of businesses.

In 1998 Larry Page and Sergey Brin offered their revolutionary search engine algorithm (PageRank technology) to Yahoo for an insulting amount of $1m. Yahoo failed to gauge its biggest competitor and refused the offer.

2002 it refused to acquire Google for just $3b after Search Engines were proven. However they had acquired the GeoCities and $3.6 billion and $5.7 billion respectively in 1999.

Yahoo invested money in acquiring companies that gave them opposite results from its expectations.


  2. GeoCities

  3. Overture Services - they got a good enough ad-tech (text links) - but Google was able to copy it very fast.

  4. Flickr 2005 acq and Mismanagement - its bright execs (later produced block buster Slack) were planning to turn the photo-sharing site into a social network long before Facebook. Yahoo messed up the acquisition, did not invest and didn’t pay any heed this side, however, and missed the social media boat.

  5. Right media

  6. Tumblr $1.1b and Mismanagement - but could not profit from it. Reality is founders were using porn and millenials to boost user traffic. A "professional" site cut down on that and Tumblr was history.

  7. Failing to buy Facebook for measly 10%. In 2006 Yahoo attempted to buy Facebook at $1 billion. But according to the reports the Facebook’s board of directors forced Mark Zuckerberg to accept an offer of $1.1 billion. Yahoo CXOs considers this amount overvalued and missed this golden acquisition as the current valuation of Facebook is approx $140 billion.

  8. Rejection of Microsoft $45b proposal to buyout Yahoo reflects the lack of foresightedness of Yahoo’s executives. Of course by 2021 it AND AOL ended up sold for one tenth.

Wrong CEOs hired after Yang - Made Yahoo failures worse

Yahoo went with a media executive from Hollywood Terry Semel as the CEO - but he had no clue how internet media works.

Who had a stronger background but was not much aware of the future internet world like Google's tech heavy CEO hire Eric Schmidt.

2018-Sep Consolidation of Yahoo and AOL

On September 10, 2018, AOL's parent company Oath after Yahoo acquisition consolidated Yahoo BrightRoll, One by AOL and Yahoo Gemini to 'simplify' adtech service by launching a single advertising proposition dubbed Oath Ad Platforms.

AOL original thru TW merger

1980s-1995 AOL - Leader Internet Access on CDs

1985 The service traces its history to an online service known as PlayNET. PlayNET licensed its software to Quantum Link (Q-Link), who went online.

1988 new IBM PC client launched, eventually renamed as America Online. Prior to 2006, AOL was known for its direct mailing of CD-ROMs and 3.5-inch floppy disks containing its software. The disks were distributed in large numbers; at one point, half of the CDs manufactured worldwide had AOL logos on them. The marketing tactic was criticized for its environmental cost, and AOL CDs were recognized as PC World's most annoying tech product.

  1. AOL grew to become the largest online service, displacing established players like CompuServe and The Source.

1995, AOL had about three million active users providing a dial-up service as well as providing a web portal, e-mail, instant messaging and later a web browser following its purchase of Netscape.

AOL was once the service that millions of people used to get online

But by 1996, ISPs were beginning to charge flat rates for unlimited access, which they could do at a profit because they only provided internet access. Even though AOL would lose money with such a pricing scheme, as it was charged by the hour by telecom companies. AOL was forced by market conditions to offer unlimited access in October 1996.

Rapidly by 2000+ AOL got hurt as DSL, Cable bundles and later fiber supplanted the low speed dialups.

  1. Massive Growth Marketing ploy

  2. Leveraging a Need to get on Internet - right timing as Wireline companies dragged their feet.

  3. Leadership

  4. "I had seen the success of AOL really was having that clear vision, and having a team that was kind of very aligned on, and passionate about it." - Case

  5. Arm Twisting forcing "investments" and advertisements for new Internet companies to get started. AOL became the evil empire of its time.

2000 AOL acq TW for $165b with its Overvalued Stock

By 2001, at the height of its popularity, it purchased the media conglomerate Time Warner in the largest merger in U.S. history. AOL rapidly shrunk thereafter, partly due to the decline of dial-up and rise of broadband.[2] AOL was eventually spun off from Time Warner in 2009, with Tim Armstrong appointed the new CEO. Under his leadership, the company invested in media brands and advertising technologies.

AOL's Steve Case was the lead architect of the deal, and he still believes the assets were there to make it work.

Done just months before dot-com bubble burst, it was the largest merger deal in history, resulting in the world's largest media conglomerate.

By 2005, Case had left as AOL's value declined exponentially, setting the context for years of clashes between the two companies' cultures and ambitions. Case left saying "it was an unsustainable partnership" and TW execs basically kicked him out.

The merger ultimately fell apart in 2009 as a failure.

PROBLEM: Culture Clash - competition

AOL's side found Time Warner to be too old-fashioned

Later on even AT&T dissed New York and Hollywood personalities as "baseball players" - but they are also biz-execs!

Short term Thinking - TW BLOCKED

TW's side found AOL to be a threat to their businesses - so they acted as brakes as Google, Yahoo and later Facebook jumped ahead. There were a lot of people at Time Warner that weren’t as enthusiastic about the digital path, weren’t as enthusiastic about the internet, were worried about how it might cannibalize some of their businesses

"So they tended to play defense to protect what already existed as opposed to playing offense and try to create what the future would be. If AOL-Time Warner was run as one company, not as a bunch of independent, siloed divisions, it would have enabled us to lead the way in digital music, lead the way in digital video, and other kinds of things.” - CASE

POOR Execution

Later, Steve Case says failure of the 2000 AOL Time Warner was due to shoddy execution. "Vision without execution is hallucination. Having a good idea is important, but being able to execute the idea is even more important, and that comes down to people and priorities, and we were unable with the combined AOL Time Warner company to get that side of it right

Verizon Strategy

Telecom Pampered Monopolies can't handle Competition

Companies like AT&T and Verizon have spent the better part of a generation as government-pampered, natural monopolies. As such, creativity, competition, innovation, and adaptation are alien constructs. They're just not built for the kind of competition you see in markets like Ad-tech or short-form online video.

Misallocating Capex - when they do try to compete, that usually involves throwing money at often mindless acquisitions like AT&T DirectTV/TW and Verizon Go90/AOL/Yahoo. But despite billions of dollars, an ocean of regulatory favors, and endless hype, the end result has been a massive parade of stumbles and misfires by stodgy CXOs.

Verizon wanted in on Lucrative Ads of Fb/Google

The executives at Verizon thought it would be a great idea to buy two sharply declining 90's media brands and mush them together, hoping this would allow them to magically elbow in on the Google ad revenues they'd coveted for so long. Of course that didn't go particularly well either.

Video Go90 Failure

The failure of Go90 hurt Verizon's attempt to rebrand itself as a sexy, Millennial-friendly streaming video service

2014 Verizon Acq AOL for $4.4b, New Strategy

AOL is part of its “strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium experience.” - Lowell C. McAdam, Verizon’s CEO

2017 Verizon acqs Yahoo for $4.5b

Tim Armstrong, the head of AOL, was part of 2015 deal, and he soon persuaded Verizon’s executives to add to its media holdings. Mr. Armstrong orchestrated the 2017 purchase of Yahoo for $4.5b.

Despite making a great stink about rebranding its AOL/Yahoo media and ad empire "Oath," by late 2018 Verizon was forced to acknowledge the whole thing was effectively worthless.

2021 Q1 $4.4b Sale to Apollo PE at Half its cost!

Now in 2021 Verizon wants to focus on building its 5G network and avoid further investment in AOL-Yahoo stagnant empire.

  • In 2019, Verizon wound up selling Tumblr to WordPress owner Automattic at a massive loss after a rocky ownership stretch.

  • HuffPost had been sold to Buzzfeed in November 2020.

  • 2021 Q1 Verizon offloaded its media business to Apollo Global Management in a deal valued at $5 billion as the mobile phone giant focuses on building out its 5G network.

The sale will include its advertising technology business.

Verizon will retain a 10 percent stake in the newly formed media group, the company said in a statement.

Apollo can tighter manage and in traditional PE fashion lead to layoffs. Failed management like Marissa Meyers have tried all kinds of strategy. current CEO Gowrappan is suggesting that the company will be able to develop new sources of income such as subscriptions and e-commerce and hoping that it will now have the investment and resources needed.


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