MediaFile

Have AOL and Yahoo picked up the pieces?

“There are no second acts in American lives.” — F. Scott Fitzgerald

Good thing Fitzgerald didn’t live long enough to tell that to AOL and Yahoo, which are confounding wet blankets with sparks of renewed life and relevance. The bit of renaissance for these Internet pioneers comes when Google and Apple are in a bit of a rut and Facebook seems to have found its bottom. (The one constant: Groupon and Zynga are still floundering.)

None of these things are related, of course. There is no astrology of technology, aligning the stars in such a way as to favor some and deny others. Tech success isn’t a zero-sum game, especially when valuations aren’t everything. Just look at Apple’s rise and fall and rebirth.

Apple’s trajectory has so far neatly followed a classic theatrical arc. Act 1 was exciting and prodigious. Act 2 was dismal, with Steve Jobs in exile for 11 years and the company near death. But Act 3 brought us the iRevolution. There’s no greater inspiration for AOL and Yahoo than the knowledge that down is not necessarily out — that the same forces that brought you down to Earth can also slingshot you to infinity, and beyond.

The news for AOL and Yahoo has been positive of late. AOL’s revenue didn’t decline last earnings period (for the first time in seven years). Yahoo is trading at a 52-week high despite what some thought was a vague and platitudinous turnaround strategy articulated by Chief Executive Officer Marissa Mayer in September.

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

Editor’s note: This piece originally ran on PandoDaily.com. 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.

AOL expected to dole out patent money in buyback- report

AOL has finally decided how to distribute the pile of cash it received from Microsoft when it sold the software titan the majority of its patent portfolio for more than $1 billion, according to AllThingsD’s Kara Swisher, who reported its will be in the form of a buyback. The announcement is expected later this week, Swisher said.

An AOL spokeswoman did not immediately respond to a request for comment.

The patent sale was one of the big sticking points for the activist hedge fund Starboard, which failed in its attempt to gain  seats on the AOL board during a proxy fight that played out in mid-June.  One battle of many was over who first had the idea of selling the patents–Starboard or AOL. Throughout the spring both sides made their case: AOL had said it was already in the process of auctioning off its patents way before Starboard starting amassing a stake in the troubled Internet company. Starboard alleged it pushed AOL to liquidate the majority of its patents.

Either way, shareholders win.

Swisher cited sources close to the matter that said AOL ultimately went with the buyback after talking with shareholders and because it made the most sense from a tax perspective.

Top Patch editor’s “bittersweet” exit

In case you haven’t had your fill of AOL news this week: Patch editor-in-chief Brian Farnham surprised employees today by declaring he will be out the door May 4.

The once-mighty Internet corporation stunned Silicon Valley just days ago by announcing it was unloading the majority of its patents to Microsoft for more than $1 billion. Now, Farnham’s imminent departure raised questions about the future of a once highly touted hyper-local news and community site that reportedly lost $160 million in 2011 alone.

AOL’s media business now also spans TechCrunch, Engadget, and the Huffington Post — all under the auspices of Arianna Huffington.

Samsung takes the Sony media route with ex-AOL, ex-YouTube hire

Samsung Galaxy tablets (Photo: Reuters)

Samsung, the South Korean consumer electronics giant, has spent most of the last two decades eating the lunch of rival Japanese electronics giant, Sony.  While Sony has had struggled with all types of existential debates and attacks at home and abroad including, the global hacker attack of its online network, Samsung has gone from strength to strength in setting the electronics agenda with its cutting edge  TVs, phones and tablets.

A lot of Samsung’s success could be put down to be its focus on the basics: making great mass market products and not getting distracted with creating or distributing content. By contrast, Sony not only owns the world’s second largest music company and a major Hollywood studio but also a video games business.

The problem is that Sony has never been able to figure out how to make all those things work in conjunction with its position as one of the world’s largest device makers. Most recently it has launched new online music and video services that it no doubt hopes will help sell more devices. It’s very early to tell if that will strategy will work.

AOL rocks the GOP vote

No doubt this is a politically divided nation; just go to a dinner party and see what happens when some half-in-the-bag neighbor brings up health care or gay marriage or taxes — or, apparently, absurdly, email providers.  If you can believe it, a new poll out today shows a major difference between Republicans and Democrats when it comes to picking their favorite email service.

It seems that Republican voters favor AOL over every other email provider, according to a survey of 1,184 registered voters by Poll Position. In fact, about 20 percent of them picked AOL as their preferred email provider, ahead of both Google (18.9 percent) and Yahoo (15.6 percent). Democrats took a completely opposite view, picking Google as their favorite (27.3 percent), followed by Yahoo (15.6 percent). And what about AOL? It didn’t fare well, with only 5 percent of Democrats picking it as the best service.

Why such a significant difference? Tough to know. I ran it past a number of people, and the best response I got, from a good friend and keen political observer, was this: “I would guess if you held age, location, and income steady, the differences would be negligible.”

Tech wrap: Olympus shareholders want entire board purged

Pressure mounted on Japan’s Olympus to take radical action after it admitted to hiding losses on securities investments for decades, with the camera and endoscope maker’s largest foreign investor demanding the resignation of the company’s entire board. Southeastern Asset Management, which owns about five percent of the 92-year-old company, said Tuesday’s admission “changes everything”.

Brushing aside new Olympus President Shuichi Takayama’s insistence he was “absolutely unaware of the facts,” Southeastern told Reuters correspondents Sinead Cruise and Kirstin Ridley that any further reign of the Olympus board risked damaging the company’s key medical business. Takayama, a previous board member who was promoted last month, blamed former Chairman Tsuyoshi Kikukawa, Vice-President Hisashi Mori and internal auditor Hideo Yamada for the cover-up, saying he would consider criminal action.

Former Olympus CEO Michael Woodford, who was fired on October 14 after persistently asking why the company had spent around $1.3 billion on obscure fees and acquisitions, told Reuters that the company’s partners should come under close scrutiny after Tuesday’s admission and that questions remained to be answered about the money trail. “You need forensic accountants going in there to find out where the money has gone, who has worked with Olympus, who has cooperated with Olympus, who has received fees from Olympus,” he told Reuters Insider. “Those are questions we need answered. And then we need an impairment test.”

Tech wrap: Sony suffers as TV picture dims

Sony warned of a fourth straight year of losses, with its television unit alone set to lose $2.2 billion on tumbling demand and a surging yen, sinking its U.S. shares and raising concerns about the viability of its high-profile TV business. Investors had expected Sony to reduce its profit forecast, but not flag a swing to massive losses.

The maker of Bravia TVs, Vaio computers and PlayStation game consoles cut its sales forecast for TVs, cameras and DVD players and said it may report a 90 billion yen ($1.1 billion) net loss for the current financial year, scrapping its earlier net profit estimate of 60 billion yen.Sony’s U.S. listed shares closed down nearly 6 percent.

A small Spanish tablet maker won a patent infringement battle with Apple in a rare victory against the tech giant in its global defense of markets for its iPads, a court document showed. Spain’s Nuevas Tecnologias y Energias Catala (NT-K) successfully appealed a 2010 injunction from a local court to ban the import of its tablet computer — manufactured in China — to Spain. NT-K, from the Valencia region of Spain, is demanding compensation from Apple for losses during the ban of its product and is suing the U.S. giant for alleged anticompetitive behavior.

AOL, Yahoo, Demand Media set sights on the ladies

It’s early October in New York which means that Advertising Week, which kicked off on Monday, is officially in full churn.   This year, the organizers of the conference that attracts all stripes from publishing outfits to retailers to ad agencies  may as well have slugged the event Ladies Week given the number of companies pitching to women.

Specifically that would be AOL, Yahoo and Demand Media all of which launched in the past couple of days “premium” video channels catering to the women, and, by extension, consumer packaged goods companies looking for a means to place their online advertising dollars.

AOL rolled out more than 15 original Web series some aimed at the ladies with such titles as “Little Women, Big Cars,” ” A Supermodel Stole My Husband,” and “Jocks & Jills.” (An aside: AOL also touted its “You’ve Got” one minute series lumping in President Barack Obama with other “notables” such as Kevin Bacon and Paula Abdul.)

Tech wrap: AOL talking merger with Yahoo?

AOL Chief Executive Tim Armstrong has reportedly approached private equity firms to gauge interest in a deal with Yahoo that would place Armstrong as the head of the combined company, according to a Bloomberg report.

CNBC later reported that a source close to Yahoo said the company had no interest in a deal with AOL.

AOL shares closed down 5.3 percent at $14.72 while Yahoo inched up 0.3 pct to $14.48.