AOL has had a lot to live down. Perhaps no American public company has had as much of a shadow pursuing it all through these years.
But seemingly against all odds, AOL has accomplished the feat of burying the past and making even the most resounding skeptics respect what it is doing now.
A little more than a decade ago, AOL (AOL) acquired Time Warner (TWX) in a deal that many ordinarily skeptical journalists -- yes, this one was among them, I admit -- praised the partnership as a sign of progress. It seemed to match the new technology of the Internet with one of the traditional print media's rich pedigree. But it didn't turn out that way. The deal was eventually blasted as the worst combination in corporate American history.
In fact, within a few years, the Internet bubble had collapsed and the new-media wreckage could be seen from coast to coast. AOL and Time Warner employees bickered and engaged in open warfare with one another, convinced that the professionals in the other camp were a bunch of idiots and hacks.
AOL and Time Warner mercifully parted company after a few years.
But that was then. What AOL is doing right these days, as a stand-alone company, is making a big bet on content, symbolized by its acquisition of the king of the blogosphere, the Huffington Post.
AOL has forged an identity of its own. At times, its hallmark has been cost-cutting, which has pleased Wall Street (of course).
But chopping jobs can only work well for so long. AOL will have to show the Street that it can produce growth organically.
AOL wants to compete against the likes of Yahoo (YHOO) in terms of having a reputation for contnt.
AOL is depending on The Huffington Post and the AOL On Network, a 14-channel video product, to act as its shining symbols. Google’s (GOOG) YouTube still leads the online video universe, but AOL is second in the number of videos watched, albeit far behind the leader.
For AOL, that counts as a happy event, as advertisers will fork over more money for video spots than those traditional display advertisements. AOL’s online traffic hasn’t budged much in the past few years, but viewership at The Huffington Post has jumped since the opening of 2011.
Now AOL has to keep it up.