MediaFile

Make way for AOL

Today marks the beginning of the end of what is probably one of the most disastrous media mergers in recent corporate history — AOL and Time Warner. In 2000, AOL shelled out nearly $150 billion for Time Warner, but things didn’t quite work out as planned.

The folks at Time Warner have given ample hints that a separation from AOL was inevitable, especially as part of a strategy shift that will (hopefully) result on the media conglomerate returning to its core business. Hiring former Google executive Tim Armstrong to head AOL had created even more speculation that the split was coming soon.

Now that the spin-off has happened, what lies in store for AOL as an independent company? In January, AOL said it will focus on three areas: content, advertising and social networking. But things haven’t exactly been rosy at AOL, revenue-wise. So for the time being, it gets to hold on to the access line business, which loses value day by day as more people move to broadband, but still generates enough cash to make it an asset worth coveting.

AOL could also decide that Bebo, the social networking site it overpaid acquired for $850 million last year, is not justifying its price tag and decide to sell it off — although the company has been adamant that Bebo is integral to AOL’s transformation. Potentially, the cash it earns from the access business and whatever it gets from a potential Bebo sale could help AOL — both time-wise and money-wise — figure out its next step, especially because the advertising market shows no signs of coming back any time soon.

As for what that next step might be, we don’t have a clue, but figuring out how to make money off web content could be a start, most likely through smart deals. Maybe with some help from the “frenemy?”

Twitter vs. Facebook — you make the call

The top brass from Twitter and Facebook have been all over the place in recent days, starting with the Reuters Global Technology Summit. No matter the venue or the executive, the questions are pretty much the same: Are you going to put the company up for sale? If not, when are you going public? And how on earth are you going to make money? And when?

We’ll skip a rehash of yesterday’s news and interviews, but you can find articles just about anywhere you want. Reuters, The Wall Street Journal, The New York Post, BreakingViews, paidContent, Advertising Age, and, well, basically every other media outlet are carrying stories today about one or both of the web darlings.
So instead we’ll ask you a straightforward question. Which one — Facebook or Twitter — would you buy a piece of, if you could?

Keep an eye on:

    The following from TechCrunch: “Sources close to AOL tell us that the board of directors will make a final decision on the AOL spinoff at a board meeting this Thursday, May 28, possibly undoing the $147 billion 2001 merger of the two companies. Sources characterize the decision as ‘a done deal’.” Microsoft goes at Apple — again. The company plans to launch a new version of its Zune portable media player later this year in the United States, incorporating high-definition video, touch screen technology and Wi-Fi connection. (Reuters) BookExpo America isn’t looking so hot this year. In the New York Post, Keith Kelly writes that “the turnout is expected to be way down — about 20 percent less exhibition space was booked this year — and many big publishers like Random House are cutting back while others like Macmillan and Rodale plan to skip the floor show entirely.”

(Photos: Twitter’s Biz Stone (l.), Facebook’s Mark Zuckerberg (r.); Reuters)

AOL’s Tim Armstrong’s more worried about Main St than Wall St

AOL’s recently appointed chief executive, Tim Armstrong, has only been in place for three weeks but Wall Street is waiting impatiently for his next move. He’s started to shake up the ad team. Investors are focused on when parent company Time Warner will spin off the Internet unit, which has lost favor with Wall Street, advertisers and users alike.

Armstrong, gave his first interview since starting on April 1 to Ad Age Editor Jonah Bloom at the 4A’s advertising conference in San Francisco. Though he has declined doing interviews since he joined, AOL’s communications people said Armstrong was keeping a commitment he’d made while he still at Google.

The three-part interview can be seen at Ad Age here. The fireside chat covered topics like AOL’s branding, AOL’s undervalued ad space, and how Armstrong had to leave Google by the tradesman’s entrance on his last day.

TV Everywhere’s high priest Bewkes keeps preaching

One day soon you’ll be able to watch your TV everywhere: online, on-the-go, your phones, just about everywhere and Time Warner chief Jeff Bewkes wants you to know about it and believe it.

Bewkes, perhaps relieved to talk about something other than how best to get rid of AOL , took the opportunity on Time Warner’s first quarter earnings call to share more of his vision for how he plans to free your favorite TV shows from the shackles of the cathode ray tube box (yes, some of us still own those).

The way Bewkes sees it if you’re already subscribing to a TV channel at home, you should be able to watch it for free on broadband from any provider, wherever and whenever you want.

Swine flu talk spikes up on Facebook

Facebook has been mapping swine flu discussions among its members for the past few days using its Lexicon application, and it’s pretty cool to see how the conversation on Wall posts shot up over the weekend as more and more cases of the disease came to light in the United States.

Lexicon, for those who don’t have to follow Facebook’s every move, is a tool the social networking site uses to follow trends on words and phrases that are being used on “Walls,” the open space on each member’s profile where friends can post comments. Kind of like how you can take the pulse of topics trending up or down in Twitter search.

The chart below, courtesy of Facebook, shows how there were no mentions of the term “swine flu” before the evening of April 23 on any of its 200 million members’ walls, but people start discussing it quite a bit over the next two days, causing a sharp upward spike.

Can’t get enough of that (Kindle) reading thing

Just as we’re getting over the buzz and acclaim for the new Kindle e-reader, Amazon comes right back at us. This time, it is selling    e-books for the iPhone and iPod — that’s right — through a Kindle application that can be downloaded from Apple’s App Store.

Here’s how the Wall Street Journal describes it: “Amazon’s software application, which can be downloaded free of charge, allows iPhone and iPod Touch users to read books or periodicals purchased on the Web or through their dedicated Kindle device, usually for $9.99. Using a service that Amazon calls whispersync, the program keeps track of a readers’ latest page in any given book across both a Kindle and iPhone.”

Amazon has competition, of course, from Google as well as other e-book sellers. Still, give credit to Amazon for creating big hype for its Kindle (which is still a relatively small market, regardless of all the press it gets).

One big, happy, musical family

Hey, Madonna meet Miley Cyrus. Jay-Z, these are the Eagles. You all could be one big happy family. Sort of like the Brady Bunch.  Or the Partridge family!

Only, however, if merger talks talks between Ticketmaster Entertainment and Live Nation result in a deal — and if that deal isn’t blocked by regulators worried about too few power players in the ticket  

Here’s what we reported: A source briefed on the matter told Reuters that talks are at an advanced stage, but could still fall apart over issues such as management control.

Pay TV: Shelter from the storm?

Safe haven. Two magical — and mysterious — words. Cable and satellite companies didn’t fit the safe haven bill in 2008, but 2009 just may be there year.

According to a Reuters story out today, “cable and satellite service providers now hold the promise of strong free cash flow growth as they retain old customers but spend less on deploying set-top boxes and digital video recorders due to a fall in new subscriber growth.”

Remember, however, that before the economy fell apart, a number of investors considered the pay TV industry “recession proof.” The argument went that even in the toughest of times, Americans would stay home and watch TV, saving money on trips to movies or out to dinner.

See you at the job bank

We were talking the other day about job cuts — more specifically about who would be next to feel the axe blade. We’d seen big cuts at Viacom, Omnicom, Warner Brothers and Time Inc, and, you know, it obviously didn’t take a genius to figure more were coming.

The next day: A memo from AOL Chief Executive Randy Falco announces that the Internet unit of Time Warner will cut 700 jobs, or about 10 percent of its workforce;  Reader’s Digest says it will cut 8 percent of its staff.

And now we come to Walt Disney Co, which is cutting about 5 percent of its workforce through a combination of 200 layoffs and a job freeze on another 200 positions.

Dark days in Hollywood

 If that notion of a recession-resistant entertainment industry hasn’t already been debunked, just get in touch with one of your pals out in Hollywood. They’ll tell you how bad it is — how jobs are disappearing.

Warner Brothers Entertainment is the latest to cut staff, announcing 800 jobs would be lost, or 10 percent of its worldwide staff.  NBC Universal and Viacom have already cut jobs, and industry watchers expect more job cuts to be announced by Walt Disney and Sony Pictures.

Perhaps more than other layoffs, the Warner Bros cuts send a signal of just how bad business look, The New York Times points out.