- Despite amassing a large content business with over 100 million unique visitors and $573 million in revenue, it believes AOL's Display business is losing more than $500 million per year(1).
- AOL's challenges in Display are a direct result of the Company's high cost strategy, which is based on substantial in-house editorial and sales personnel.
- Patch is a structurally flawed business model that Starboard believes loses $150 million per year(2).
- The business is high cost and is not scalable.
- Patch's value proposition for local advertisers is poor given the lack of an attractive measurable ROI and high effective CPMs.
- Even at Patch's target revenue model, Patch would still lose money.
- Based on Starboard's analysis of the key drivers of Search on AOL.com, the Display business should be analyzed independently from Search and AOL's other assets.
- AOL's owned content properties drive less than 2% of visits to AOL.com, and Patch drives only 0.02% of visits to AOL.com.
- Owning and producing content does not necessarily improve engagement versus outsourcing content.
- The Company must dramatically improve the profitability of its Display business and either sell, partner or shut down Patch.
Starboard Files Investor Presentation And Sends Letter To AOL Shareholders
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