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AOL stock falls, but media giant has prospects

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Business Wire

(Read caption) On its first day of trading as an independent company, AOL Chairman and CEO Tim Armstrong (center) rang the New York Stock Exchange's opening bell. The media giant faces pitfalls with its new strategy.

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AOL is bigger than you think. It's not just a place to do your instant messaging or an access service to the Internet. Celebrating its first day as a standalone venture Thursday, it's still a sprawling media company after a recent split from Time Warner.

AOL boasts a monthly global audience of 250 million people and 80 Internet sites. Its content is mostly written and produced in-house by a huge staff of 3,500 which, according to the company's press release, includes nine Pulitzer Prize Winners, seven Baseball Hall of Fame Voters, three Heisman Trophy Voters, and two Pro Football Hall of Fame Voters.

So why isn't AOL considered a giant in the media business? Because it has a branding problem.

Until it can boost the visibility of its content sites, even its better-performing ones like StyleList, BlackVoices, Asylum, and Spinner, it won't attract the advertising it needs to keep going as the large content-provider it currently is.

And AOL can't rely on its declining Internet-access base to provide that boost. It will have to make its way in the cold, crowded waters of Internet journalism that the Monitor and just about every other publication are swimming in.

Despite the arrival of chairman and CEO Tim Armstrong, formerly of Google, Wall Street isn't particularly impressed with the company's strategy. On its first morning of trading as an independent stock, AOL lost more than 2 percent of its value. But it retains a strong name and plenty of experience in online media. If ad revenues pick up as the economy recovers, the company could retool and thrive.

Jump in and join the crowd, AOL. The waters of new media are bracing.

See also:

Goodbye, AOL triangle. Hello, AOL goldfish.
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