The media is viewing Time Warner’s creation of AOL’s new “MediaGlow” unit as a way for Time Warner to continue insulating its online media properties from the taint of AOL’s legacy as the dialup ISP of the last generation — a business that’s heading nowhere, fast.
It sounds like a good (if somewhat weakly named) move at first. For more than a year, the Time Warner unit has sought to rev up its income from its Web properties. Working off Time Warner’s most recent quarterly figures, it appears that AOL’s close to pulling that feat off: The unit currently rakes in almost as much money nowadays from ads as it does from subscriptions — $550 million for advertising revenue, versus $634.6 million for subscriptions.
Still, considering that AOL’s not even the ISP of last resort any more, AOL’s ad unit could be doing far better. Worse, like the ISP business, ads are also trending down: AOL’s overall revenues decreased 17 percent ($207 million) to $1.0 billion, due to a 26 percent decline ($165 million) in subscriptions and a 6 percent decrease ($33 million) in advertising.
Enter MediaGlow, which is going to fix all that. The new division is going to centralize AOL’s entire online publishing efforts with the goal of greatly expanding AOL’s global reach in the coming year.
According to comments given by MediaGlow chief Bill Wilson to Mediaweek, it’s building out MediaGlow’s non-AOL-branded content properties that’s going to help differentiate AOL from Yahoo and MSN. And, hopefully, move up the pageview rankings.
The downside: AOL has a heckuva lot of work ahead of it. Starting with understanding today’s online media business.
