This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

In Praise of AOL

There was also a lot of criticism of Armstrong at this time (and I partook in some of that myself). The shine had come off Armstrong. Many concluded his past success was obviously due to the Google money machine and not his strong selling skills. Others pointed to his quixotic effort to keep pouring money into Patch, AOL's hyper-local website strategy that seemed (and still seems) doomed.

It wasn't lost on people that Patch had been an angel investment of Armstrong's before his arrival at AOL. Armstrong seemed to be throwing good money after bad on a pet project for which he still carried a torch.

Of course, later in November 2011 Armstrong, AOL and the board came under even more scrutiny when an activist investor started making noises about a proxy fight.

Through all this, Armstrong kept on keeping on. He kept making the rounds of the media and investors telling the story, even if it seemed at times no one wanted to listen to him.

He also did a number of practical things. He got the board to use some of its remaining cash on stock buybacks starting in August 2011. He fought off the activists by talking to Microsoft (MSFT) and Facebook (FB) about selling part of its patent portfolio to them in exchange for a lot of cash. That was at the time that newbie Yahoo! (YHOO) CEO Scott Thompson had authorized an attack on Facebook over patents.

Through all that patent fighting that enveloped the tech world with Apple (AAPL), Google and others, AOL was the one company that made out like a bandit from the hysteria. The patent sale and then license back to Microsoft and Facebook was a master stroke.

No one -- not even these patent experts who occasionally go on business TV with bow ties -- ever thought AOL could wrangle a billion dollars out of anyone. It did. When AOL announced the deal, the stock rocketed over 43% in one day. When your stock is only trading for a billion and a half market cap and you do a billion-dollar deal, that's what happens. And it just kept going up.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AOL $0.00 0.00%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs