Ted answers the hard questions about the new AOL (or “10% better is all it takes… “)

Ted answers the hard questions about the new AOL:

  • Question #1: Can the profits from AOL’s advertising business grow fast enough to offset subscriber losses?
  • Question #2: Can AOL keep its departing paid users and get new users to try its services?
  • Question #3: Can AOL grow its page views and audience even as it loses paid subscribers?

November will be my one year anniversary at AOL and I have to say I’ve learned a lot in my year at AOL. This company was in the middle of a huge paradigm shift when I arrived. You had a huge, but obviously shrinking, dialup access business competing for attention with an advertising business that was just starting to tick up. Of course, the access business is huge and has massive margins so you can’t ignore the huge money-making machine in the room.

Imagine being in a room where you have this huge machine printing $100 bills next to a tiny machine printing pennies at the same rate–which one do you give your attention to? Now the machine making pennies has been upgraded to print singles. At some point it will move to printing $10 and $20 bills–but you still have to pay attention to the older machine. It’s really hard to shift your focus, let alone focus on both machines–but we had no choice.

What Jon Miler did over the past year was very impressive. He moved the entire organization from being (rightfully) obsessed with the access business to being obsessed with the advertising business. That is not a simple thing to do, trust me I was at a lot of the hard, hard meetings where folks battled it out. It’s like levitating an aircraft carrier and turning it in a completely different direction. We respect and love the access business, but we’re realistic about it’s prospects and we’re not going to invest in it like we used to (think our millions of CDs or having huge call centers). We are 100% focused on the “new” model, and the 46% growth in our advertising business this past quarter proves we are the perfect people to do it.

We had a lot of dark moments over the past year (think: “the call,” “data Valdez,” and “AOL is malware”). However, we stuck together and listened to the market. In fact, I think those three mistakes were the best things that could have happened to AOL–the market gave it to us and the market was right. We needed to do better and we have done better. As a team we’ve showed that not only can we do it–WE CAN KILL IT!!! 46% growth… second only to Google. Way ahead of Yahoo, MSN, and CNET in % growth. I have to repeat that to myself three or four times to believe we turned it around so quick. We’ve got a long way to go, but as Mark Cuban told me over and over again: “SALES SOLVES EVERYTHING!”

We have great product and an AMAZING sales force–best in the business in my mind. I go on sales calls and I am blown away by the solutions AMN (AOL Media Networks–our ads sales group) puts together. They make these books that if I was an advertiser would make me move my Yahoo, MSN, TV, print, and radio budgets to AOL. Simply put, our sales team works harder for our clients. That’s what this is about… hustle. My friend Matt Coffin told me about his philosophy of making five different verticals in your company just 10% better and how that can have a huge combined effect. That’s really what we’ve done this past year. We got 10% better at five different things and it shows in our sales numbers. We can’t forget that 10% better at five things means you get 75% better because of the network effect.

How can we make our blog launches 10% better?
How can we make our advertising systems 10% better?
How can we make our editorial 10% better?
How can we make our recruiting 10% better?
How can we make our servers 10% better?
How can we make our marketing 10% better?
How can we make our SEO 10% better?
How can we make our mobile solutions 10% better?
How can we make our software 10% lighter?
How can we make our email 10% faster/better?
How can we make our products 10% simpler?

Anyway, I couldn’t be prouder to be at AOL. The next year is going to be spectacular!

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