AOL: Down so long, it’s starting to look up

Editor’s note: This piece originally ran on It is being reprinted with permission.

Good news! For the first time in seven years, AOL’s revenue didn’t shrink! The company said Tuesday morning that it brought in $532 million in revenue last quarter, flat with the same quarter one year ago. Which is to say AOL still hasn’t seen any growth since 2005. Okay… maybe it’s not such great news after all.

But AOL investors are happy. They pushed the stock up as much as 16 percent Tuesday, after AOL reported its earnings and promised a $5.15 a share dividend this December, financed by the $1.1 billion deal to sell and license its patents to Microsoft. AOL also posted a net profit of 22 cents a share, versus a 2-cent loss a year ago. That profit was well above the 17 cents a share analysts were expecting.

After three and a half years as CEO, Tim Armstrong is starting to see some success in turning AOL around. This is a notable accomplishment for two reasons. First, turnarounds in the Web industry are as rare as they are difficult. More often, they result in a company merely treading water and not really reviving. Second, AOL’s turnaround was especially tricky because, for many years, its profits came from the aging dial-up subscription business that was a big business a dozen years ago.

Armstrong is making a lot of shrewd moves this year. He arranged the patent deal with Microsoft, giving AOL enough cash to buy back shares and offer a dividend. That won him the support of shareholders right in time to defeat a challenge by activist hedge fund Starboard Value. Armstrong has also succeeded in cutting some costs at AOL to shore up its profits.

Bravo’s new startup show needs less Ways, more means

The Cast of Start-Up: Silicon Valley

This evening Bravo aired the hotly anticipated first episode of its technology-focused reality show “Start-Ups: Silicon Valley.” The show has been an object of chatter for months among tech media and Valley pundits, some of whom objected to the idea of a television series glamorizing the parts of their universe they see as a sideshow. (Clearly they have never seen reality television before!) I think dismissing the idea of a show is wrong: Silicon Valley deserves a pop culture examination and send-up of its weird little world. But, at least after one episode, this show probably isn’t it. (more…)

Apple in miniature

This week Apple faces two significant tablet challengers. The first is Microsoft, which is releasing its long-awaited Surface tablet on Friday. The second is… itself.

Yesterday, amidst the anticipation for the Surface and strong sales for the Kindle Fire, Apple announced a slew of new devices, the $329 iPad Mini the most intriguing among them.

The mobile era has been defined by Apple: iPod, iPhone, iPad, you know the drill. Apple ascended largely unchallenged, facing only a few stunned and weak rivals. By the time it got to tablets in 2010, Apple benefited from an unspeakably large pent-up demand for a device nobody had been clamoring for. Since then it’s sold more than 100 million iPads.

Marissa Mayer and the art of the earnings call

Editor’s note: This piece originally appeared on It is republished here with permission.

Conference calls discussing corporate earnings are often like political debates: An hour or so of jargon as dry as dirt. But much like the this year’s presidential debates, Yahoo’s earnings call Monday promised to be worth tuning into, if for no other reason that this was Marissa Mayer’s first and best chance to make her case for reviving the company. And like the debates so far, Mayer did not disappoint.

Before the call, Yahoo said its revenue rose 2 percent to $1.09 billion while its net profit was 35 cents a share. Two percent revenue growth pales next to the 45 percent growth Google saw last quarter. But it was slightly above what analysts were expecting. And the net profit of 35 cents a share was significantly above the 26-cent forecast.

The tracks of my fears

Advertisers say that if they can’t track you online, your favorite websites will die. They’re wrong.

There is lots of bad TV, and lots of bad Internet. Reducing either would be a public service of incalculable proportions. But just as some broadcasters raise the possibility of Armageddon if ad-avoiding tech like TiVo proliferates, online marketers are now making the same empty threats about the Internet. They say that rich Internet “content” would disappear if something called Do Not Track became the standard.

Do Not Track isn’t the default setting of any major Web browser, even though all offer the option to “opt-in” to a private life — to send a signal to advertisers that, on this occasion, in this window, at this time I don’t want you to make use of my surfing behavior to profile me for the sole purpose of creating ads that marketers think have greater personal appeal and are more valuable.

EBay’s buyer’s remorse

How do you know if you’re in a buyer’s market, or a seller’s?

Offline it’s pretty easy to know. There’s price pressure, abundance and not too many people vying for the same house, commodity or mint condition Pee-Wee Herman doll at the yard sale. In the land of the real, markets aren’t terribly efficient. Before the Internet changed everything, retailers were bound by geography and the ability (and willingness) of people to range. That’s why gas costs a lot more right off the highway exit than it does less than a mile down, where strangers would rather not venture. (Now, of course, there’s an app for that.)

Online, it’s easier to know where the consumer stands. In fact, online, it’s always a buyer’s market. There are, of course, always fixed costs that help determine an item’s price – a book publisher’s monopoly or the cost of jet fuel, say. But a buyer’s power to compare prices from a comfy chair has made it difficult for online sellers to gouge – to insist on a higher price than the market bears – because the market is transparent, fluid and infinite in all directions. Services like Kayak create an almost perfect buyer’s market for air travel, which was already one of the world’s most competitive businesses. Amazon’s ability to offer nearly everything at buyer’s market prices has created a retailing behemoth that doesn’t even need an Apple-like seller’s market to thrive.

And then there’s eBay, an Amazon contemporary with an identity that’s been in crisis for years.

WPP chief Sorrell shuns Twitter, Klout for personal brand– but likes mobile for clients

Advertising honcho Martin Sorrell is encouraging his clients to embrace the possibilities of mobile technology– but that doesn’t mean he is rushing to embrace every permutation of  it himself.

The WPP chief executive was in Silicon Valley last week, cozying up to technology bigwigs such as Google, Facebook, and Twitter. But spending a few days in the technology heartland hasn’t much changed how Sorrell plans to personally communicate.

Unlike News Corp’s Rupert Murdoch, a prolific tweeter, Sorrell said in an interview he has no account on Twitter– the microblogging service which many people use on their mobile devices. Nor has he chosen to measure his digital influence on the digital-influence measurement service Klout.

Jack Dorsey’s impractical double duty

Editor’s note: This piece originally appeared on

Can we finally stop pretending someone can run two companies if they just work hard enough or are brilliant enough?

I’m looking at you, Jack Dorsey, Twitter CEO Dick Costolo, Twitter investor Peter Fenton and everyone else who spent years arguing that it was totally doable. In various interviews and private conversations throughout 2011, people close to Twitter consistently maintained it was no big deal that Dorsey could build Square – one of the single most ambitious, capital- and execution-heavy startups of our day – and run product at Twitter – a company that was woefully behind on any meaningful product innovation and desperately needed a visionary leader.

You know what they all said whenever anyone asked whether this was sustainable. And you know it even if you’ve never heard it firsthand. “Well, Steve Jobs did it.”

Facebook’s billion: Are you being served?

Facebook has reached an almost unimaginable milestone: 1 billion people are active users. It is hard to get your head around that number, which represents one-seventh of the world’s population (and not every one of us even has Internet access). It’s almost half the total number of people estimated to be on the Web at the beginning of this year.

Even CEO Mark Zuckerberg can’t quite seem to comprehend it: “It’s really humbling to get a billion people to do anything.”

But despite gangbuster growth, Facebook is based on a tricky business model: The more they use members’ shared information to target them for advertisers and marketers, the less members are likely to go along, and the more they’ll realize the bargain they’ve struck. Just as Facebook effectively redefined “Friend,” it is pushing the boundaries of the public-private divide.

How Amazon used the Kindle to beat the odds

Editor’s note: This piece originally ran on It is being reprinted with permission.

Whether you own one or not, you have to respect the Kindle. In the age of digital Darwinism – where perfectly good products and companies were brutally rendered extinct by superior species – the Kindle was the little e-reader that could, not only thriving in the age of tablets but even, in time, evolving into a multimedia device that took a bite of the market share for tablets.

The Kindle was never flashy. It lacked the sexiness of the iPad, offering instead pure functionality. Its design was bland and boxy, offering up a color spectrum that could be found in a dirty ashtray. It went on sale in 2007 for $399 and sold out in five hours. Skeptics thought this was just a small but fervent niche market of book lovers who fetishized the Kindle. But in time, the Kindle proved those skeptics wrong.