AOL Considering Paid Content, International Acquisitions in Company Revamp

AOL Inc. (AOL) may introduce premium versions of its online content and make international acquisitions as Chief Executive Officer Tim Armstrong works to turn around the struggling Internet pioneer.

The New York-based owner of The Huffington Post news and commentary site is “open in the future to strategies that will help create great content and monetize it properly,” Armstrong said in an interview at the Cannes Lions media conference today. That includes subscription-based access to some of its content and partnerships with traditional media companies, he said.

AOL is among the media companies considering experiments with digital subscriptions to boost revenue and reduce dependence on advertising sales. In March, Rupert Murdoch’s News Corp., the owner of London’s Times and Sunday Times newspapers, said 80,000 users had signed up for paid digital subscriptions after it ended free access to those titles’ articles online.

“I think content subscriptions on the Internet can be a very viable business,” Armstrong said today. AOL might initially focus on business-to-business content offerings such as the AOL Defense portal, which offers news for the defense industry, he said.

AOL, which paid $315 million for The Huffington Post earlier this year, may make further content or technology acquisitions both within and outside the U.S., though another deal of that size is unlikely in 2011, the CEO said.

Revamp

Armstrong is trying to turn AOL around after its 2009 spinoff from Time Warner Inc. (TWX), which undid a $124 billion merger that was the largest of the dot-com boom in the early 2000s. He said today that the company is looking to reduce its roster of about 50 brands to streamline its operations, while keeping the amount of content it produces stable.

The elimination of some brands won’t likely involve major layoffs, he said. AOL in March said it would cut about 200 U.S. jobs after the Huffington Post acquisition.

Under Armstrong, who joined the company from Google Inc. in 2009, it’s nonetheless hiring more full-time journalists and focusing on news and content -- a drastic change from AOL’s past as the portal that first offered mass-market Web access to American consumers. Its first-quarter profit fell 86 percent to $4.7 million.

To contact the reporter on this story: Matthew Campbell in Cannes, France at mcampbell39@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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CEO of AOL Tim Armstrong

Francois G. Durand/Getty Images

AOL, which paid $315 million for The Huffington Post earlier this year, may make further content or technology acquisitions both within and outside the U.S., though another deal of that size is unlikely in 2011, the CEO said.

AOL, which paid $315 million for The Huffington Post earlier this year, may make further content or technology acquisitions both within and outside the U.S., though another deal of that size is unlikely in 2011, the CEO said. Photographer: Francois G. Durand/Getty Images