AOL’s turnaround strategy

AOL has been a company that has seen some slowdown recently. I wouldn’t go so far as to compare them to Yahoo! but lets face it – if they hadn’t had a drastic re-think about where they’re going, AOL were headed for being bought out.

So what have we seen from them recently that proves this new thinking? An entry on the Meeblog announced that Meebo were entering an alliance with AOL. Today Kevin Rose pownce-messaged a Digg story about AOL and their purchase of the social network Bebo for $850 million.

At the moment in the web 2.0 domain, we are seeing the tech giants looking to lower their costs and continue with their organic growth, while smaller firms and startups rush around like mad things trying to innovate the industry. The balance of this rain forest should hold up through the coming recession as the big players look to take on their favourite picks of those inventive startups.

What we have seen from AOL has been their top management frozen, satisfied with their position and not really pushing the company on to new heights. What has resulted has seen other firms like Google and Facebook enter the market and start to gobble up the revenue. Mention of the name AOL to me conjures the image of a company matured and resistant to change.

So it comes as a great relief to me to see that they appear to be concerned about their profitability – seeking alliances and acquisitions. With such a large company here, the “Big Bang” instant turn around is much less of an option, reassuringly they pursue something of a market adaptation strategy which will allow them to evolve and rejuvenate. After all, we all remember AOL as that company that gave away CDs with free internet and a bundle of warez that slowed down your Windows machine to a grinding pace.

Bring it on AOL! Let’s see your offering in this age of web 2.0 and beyond, we await your contribution to the revolution. Take your time though, because incremental change is surely the way to secure your longevity.