NEW YORK, May 7, 2012 /PRNewswire/ -- Starboard Value LP (together with its affiliates, "Starboard"), one of the largest shareholders of AOL Inc. ("AOL" or the "Company") (NYSE: AOL) with current ownership of approximately 5.3% of the outstanding shares, today announced that it has filed an investor presentation with the Securities and Exchange Commission ("SEC") and has delivered a letter to AOL shareholders. Starboard said the purpose of this letter and presentation is to share additional information about Starboard, its views regarding AOL's current strategy, and a high-level preview of the initiatives Starboard believes should be evaluated and implemented to improve AOL's operating performance.
Starboard is urging shareholders to vote the GOLD proxy card to elect its three highly qualified nominees, Dennis A. Miller, Jeffrey C. Smith, and James A. Warner, in place of incumbent directors Alberto Ibarguen, Patricia Mitchell, and James Stengel, at AOL's upcoming Annual Meeting scheduled to be held on June 14, 2012.
In the presentation, which is available for viewing on the SEC's website at http://tinyurl.com/starboardvaluepresentation, Starboard discusses that:
- 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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV