According to new reports, AOL is positioning itself to break free from the shackles of its current stakeholders.
The first initiative will be to buy out Google’s 5% stake in the company. Google bought a stake in AOL at the same time they secured an advertising distribution deal; which saw the two companies sharing revenue on the ad clicks.
Should AOL actually go through with the buy out, many in the industry will be watching closely to see whether the advertising distribution deal remains in place.
Given AOL owns a large portfolio of high traffic vertical sites, the distribution deal is a valuable asset in Google’s publisher inventory. That said, AOL’s ad revenue’s in the last quarter were down 17%.
The other speculation surrounding AOL is an imminent split from Time Warner – its current parent company. Time Warner has been restructuring and re-positioning AOL’s various divisions in preparation for partial or complete sale for a while.
It appears Time Warner is much closer to spinning off AOL, especially given the announcement of the Google buy back. With former Google executive Tim Armstrong recruited as the AOL Chairman and CEO, the company’s ready to break free!
So what does it breaking free mean?
It can refocus on building its own strengths and position itself as an industry leader. It has the web real estate and significant IP and technology up its sleeve, and as Loren Baker pointed out in a recent post:
AOL Search has shown more growth than Microsoft or Yahoo, with a 6.6% growth after last year. AOL has been quite aggressive in the establishment of their content network and bringing together all of the search and advertising acquisitions it has made over the past couple of years.
While overtaking Google’s share of search is still a pipe dream, AOL are positioned to give Yahoo! and MSN a real run for their money.
Watch this space…