AOL is scaling back on some of its features.
In a memo to his staff, AOL Products head Kevin Conroy explained that "BlueString, Xdrive, and AOL Pictures will be sunset." The company will also "sunset" MyMobile and "halt further investment" in AIMWorld.
By "sunset," Conroy means that they will be riding off into the sunset, pushing up daisies, and checking into Obit City.
Time Warner's (NYSE: TWX) online subsidiary has spent the past couple of years transforming itself into a portal for the general public. The company's original access provider service peaked six years ago, and AOL's response has been to tear down the wall, opening up its offerings to the Web at large, with dreams of making up the difference in online advertising revenue.
The data-storage services being axed are bandwidth-intensive and difficult to monetize, so it's understandable why their heads would be on the block. They don't lend themselves easily to ad-supported profitability, and few customers are tempted to pay for premium subscription plans when free alternatives are plentiful.
However, shelving features angers users. It also inconveniences them, as they migrate their data over to a new provider. In short, this is the kind of shattered trust that AOL might not be able to win back, if it ever does decide to give such services another go.
It certainly didn't give some of the features much of a chance. BlueString -- a media-sharing service -- was launched just 10 months ago. The move came shortly after News Corp.'s (NYSE: NWS) acquired Photobucket to pacify its MySpace users. Since AOL now owns the Bebo social networking site, it would seem that AOL might want a hand in storing the kegstand snapshots of Bebo's playful audience.
Xdrive is a more heavy-duty drive-backup service, and it's a surprise to see AOL kill it. It was originally positioned as a perk for access subscribers, who would get additional storage capacity. Does AOL really want to make its dial-up service less valuable to its dwindling base of paying subscribers?
AOL Pictures wasn't burdened by large files, but I guess it's hard to compete against sites like Yahoo!'s (Nasdaq: YHOO) Flickr and Photobucket.
The company isn't throwing in the towel. It does see growth opportunities in areas like streaming video, toolbars, desktop applications, and e-mail. However, by trimming off the capital-intensive fat of these money-gobbling features, isn't AOL really just dolling itself up for the buyout ball? These moves are little more than a tightened girdle before it sashays onto the floor, hoping Google (Nasdaq: GOOG), Yahoo!, or Microsoft (Nasdaq: MSFT) asks it to dance.
Why dance now? Because the sun sets on fading good looks, too.
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