We don’t need to rehash all of the reasons this deal didn’t work (impeccably bad timing, the decline of dial-up Internet access, mismanagement, etc.), but rather, look at what remains of AOL, and what’s still interesting about this company almost a decade after the deal that came to symbolize the absolute peak of the first dotcom boom.
The most interesting piece that remains of AOL in our eyes is probably the smallest – at least from a revenue standpoint. AOL People Networks – which comprises of several AOL acquisitions – like Bebo, Socialthing, Yedda, Userplane, and Goowy, as well as long-popular products like AIM and ICQ - is an intriguing company on its own, and actually one of the biggest in the space we cover.
AIM, and to a lesser extent ICQ, still serve tens of millions of users, which creates a platform for People Networks to drive adoption of its other social products. We’re expecting to see further advances from AOL in this area soon, in the next few releases of AIM. Overall, you’re looking at a pretty far-reaching social software company that targets both consumers and Web publishers.
That said, all is far from rosy for AOL, and spinning off a sexy but unprofitable division of AOL might not make a lot of financial sense. Overall, advertising revenue across all AOL properties decreased 20% in the company’s most recent quarter – almost as bad as the 27% decline experienced in the antiquated dial-up Internet business.