by David Holtzman
AOL is moving its Headquarters and senior executives out of Virginia and back to New York. It was only 7 years ago since AOL, in a ballsy, clicks sticks it to bricks approach, bought media mastodon, Time Warner and moved the New Yorkers down to Virginia to be part of the burgeoning Northern Virginia tech scene.
Having been one of the burgeons, I can attest to what it meant to have AOL drag a big conventional company like that down to our level--it was cool. It validated that we all ought to be billionaires because we were different. AOL stock made literally hundreds of millionaires in the DC area; you could see them buzzing up and down the toll road in their little Ferraris, Porsches and Lamborghinis. XOLers provided funding for some of the stupidest startups ever to squeak out an elevator pitch. I know because I was foolishly involved with a few of them.
Now they've thrown in the towel and they're slinking back to New York with their tails between their legs. They have decided that they are an advertising company and as such, they belong in New York with the rest of the advertising companies.
For the record, AOL was a sucky company. They catered to the stupid and unaware, the newcomers to the Internet. Their business model was a bigger version of the street vendors that sell New York maps and if possible, the Brooklyn Bridge to skyscraper gawkers in the Big Apple.
Although they've been on a buying spree lately, history tells us that buying companies is not the same things as assimilating them into a smooth, working business machine. They have a new, unproven management team, a jokey brand and no real product to speak of. Hundreds of years from now, their company will be remembered as being responsible for the hundreds of millions of CDs and floppy disks scattered throughout the world. With a legacy like that, they will need to work hard to create a workable business model. Money alone can't always do it and to be honest, a little humility goes a long way--I don't see any so far, but keep your eyes crossed, following the future moves of AOL is the business equivalent of watching Britney Spears getting out of a low-slung car.
Posted on September 18, 2007