SAN FRANCISCO -- Wouldn't it be funny if one of 2009's bright spots in tech turns out to be
Lost in the mess on Wednesday that was
fourth-quarter earnings (read: massive loss)
were at least a couple of signs that one of the Internet companies that started it all still offers value to somebody willing to work to unlock it.
That means you,
As expected, AOL's advertising revenue dropped substantially in the fourth quarter, falling 18% after a 6% year-over-year decline in the third quarter.
That steepened decline isn't particularly extraordinary, given what we've seen from the bulk of media or ad-dependent companies this earnings season (when
, it's bad out there).
At AOL, the slowdown cost the company's advertising chief Lynda Clarizio her job, which she had only had for about 11 months. (Her predecessor lasted only five months -- there's a whole Yankee-manager 1978-1991 thing going on there.)
Her replacement, former Yahoo! executive Greg Coleman, will be charged with reviving the company's display advertising business, which was widely seen as underperforming relative to the size of AOL's audience.
Another hopeful sign is that AOL seems to be closer to cutting costs in line with where the business now lies: Fourth-quarter operating income actually rose 6% to $405 million.
In a way, however, the most important metric was the tossed-off reiteration that AOL sites are still drawing about 110 million average monthly unique visitors, which is essentially unchanged from three months ago.
To put it in perspective, only three Web properties draw more monthly U.S. visitors than AOL:
, Yahoo! and
For advertisers, all of whom will eventually start spending again, AOL's network remains one of the most attractive properties to reach a broad audience.
This is why, for the previously uninitiated, the present and future combinations among the above four companies are so enticing to investors. A leveraged search deal between Microsoft and Yahoo! just
. A display-advertising empire that could conceivably built by a combined Yahoo! and AOL just
Negotiations for both of those deals have appeared dormant in recent weeks, but it's difficult to believe at least one of those won't take place this year.
Existing in parallel universes, Yahoo! and AOL have seemed like a match for some time. Both companies became bloated by previously overreaching ambitions and are now left to focus on cutting costs and where to concentrate their still-massive resources.
For Yahoo!'s new CEO, Carol Bartz, who needs to get the company growing again, wouldn't it be nice to do it with a Web audience that's twice the size?