AOL CEO: CNN-Mashable Deal Talk Shows Value of Online Content Business
NEW YORK - AOL chairman and CEO Tim Armstrong continues to believe in his company's content strategy and on Tuesday also once again called talk about continued executive turnover at the Internet company overdone.
Speaking at the Barclay’s Internet Connect Conference, he pointed to reports that CNN was looking at possibly making a $200 million play for tech news Web site Mashable. If that is true, “our content business would be one of the most valuable businesses on the Internet,” Armstrong said.
Some on Wall Street haven't been convinced that AOL's content strategy will help turn the company's business around. And activist investment fund Starboard Value, which owns a stake of about 5 percent in AOL, has assailed Armstrong's content focus as bad business.
Discussing executive departures, which some have argued are a sign of AOL's continued challenges, Armstrong said they have only made the company stronger. Some observers may see it as "a lot of drama, but we’re getting results,” he said. “There’s a lot of noise about people coming and going,” but in reality, “I have been removing people from the company who were not performing," leading their businesses to do better, Armstrong argued.
Barclays Capital analyst Anthony DiClemente didn't seem ready to change his view on AOL's stock based on Armstrong's conference appearance. "AOL remains one of the top most visited sites domestically and its properties consistantly rank among the top 5 across major online verticals," he said in an investor note. "However, AOL remains in turnaround mode, is seeing significant revenue declines in its two most profitable businesses (search and access) and is probably losing share in display." So, he said he continues his "equal weight" rating on the stock with a $19 price target.