AOL: You've Got Fail

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

This can't be good.

Kevin Conroy, AOL's executive VP of products and marketing, is leaving the company. He will head the new-media pursuits of Spanish-language titan Univision.

Time Warner's (NYSE: TWX  ) online arm has been flopping around lately, but it's certainly not Conroy's fault. In a company memo, AOL CEO Randy Falco praises Conroy's recent accomplishments. Under his watch:

  • AOL Mail had a 31% boost in page views last year.
  • AOL Music has been a hit, partnering with CBS (NYSE: CBS  ) after its relationship with Sirius XM Radio (Nasdaq: SIRI  ) fizzled out.
  • Successful apps for Apple's (Nasdaq: AAPL  ) iPhone and Wi-Fi-enabled iPod Touch have been launched.

The problem with AOL is that there doesn't seem to be a whole lot of growth beyond its free web-based email service. Online ad revenue actually fell by 6% at AOL in its latest quarter. Subscription revenue has been in a swan dive for years, but that is now intentional as AOL is focusing on its free online properties at the expense of its access business.

AOL keeps herding its paying members to the "goodbye" screen. Over the past few months alone, AOL has inexplicably whacked many premium perks, like personal Web pages and online storage. Why doesn't it just sell its access business to Earthlink (Nasdaq: ELNK  ) before there aren't any subscribers to hand over?

Banking on free email isn't much of an online model. Just ask Yahoo! (Nasdaq: YHOO  ) and Hotmail parent Microsoft (Nasdaq: MSFT  ) . They continue to lose ground in search to Google (Nasdaq: GOOG  ) despite having vibrant email properties. It just isn't easy to monetize online mail. AOL's strengths in display advertising are also under pressure in this iffy environment.

In sum, this isn't enough to justify Conroy jumping to Univision. Maybe he sees the inevitability of AOL hooking up with Yahoo! or Microsoft at some point this year, and he figures he may as well make a move on his own terms. If, despite all of his efforts, AOL keeps shrinking, Univision is better than tunnel vision.

Some other recent dot-com dealings:

Microsoft is a Motley Fool Inside Value selection. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz has been an AOL subscriber since the early 1990s and is frustrated over many of the recent services being axed. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 805351, ~/Articles/ArticleHandler.aspx, 10/28/2016 2:31:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:02 PM
TWX $88.30 Down -0.40 -0.45%
Time Warner CAPS Rating: ***
AAPL $114.48 Down -1.11 -0.96%
Apple CAPS Rating: ****
CBS $56.41 Down -0.37 -0.65%
CBS CAPS Rating: ***
ELNK $5.96 Down -0.07 -1.16%
EarthLink CAPS Rating: **
GOOGL $817.35 Down -4.75 -0.58%
Alphabet (A shares… CAPS Rating: *****
MSFT $60.10 Down -0.53 -0.87%
Microsoft CAPS Rating: ****
SIRI $4.11 Down -0.13 -3.07%
Sirius XM Radio CAPS Rating: **