AOL CEO: Time Inc. Would Be Too Expensive for Company
UPDATED: "A transaction would be challenging," says Tim Armstrong and signals that the online firm is exploring possible music strategies.
AOL chairman and CEO Tim Armstrong on Thursday said that the online company was unlikely to make a play for the Time Inc. publishing business when former AOL owner Time Warner spins it off into a standalone company.
"I am a massive believer in brands," and "the Time Inc. brand portfolio is very valuable overall," he said during an appearance at The Paley Center for Media in New York. But he highlighted that Time Inc. is more valuable than AOL, meaning that "for us to do a transaction would be challenging...It's hard to do"
AOL's Wednesday stock closing price gave the company a market value of $2.9 billion. Analysts on Thursday estimated Time Inc.'s value at $3 billion-$3.5 billion.
In his chat with long-time media industry banker Aryeh Bourkoff, who is now CEO of his own firm LionTree Advisors, Armstrong also said that AOL is looking at possible music strategies. "We have some creative ideas," he said. "We see some big gaps in the music space," meaning the firm has two to three things that it could do that may prove to be meaningful. But he didn't elaborate on the opportunities and also said that he isn't sure if the company will invest much in the space.
Asked about a growing number of technology companies looking to become media and content players, including Samsung and Intel, Armstrong said Thursday that there is likely not enough talent to make "awesome content" for all who want to be players in the field. He also described Facebook as a friend for AOL rather than a big competitor.
Discussing AOL's content strategy, Armstrong said it was "controversial" and led to a proxy battle not long ago, but big shareholders have more recently told him they are pleased with the company's progress. "It caused us a lot of problems," but "content is so important," he said.
He also mentioned the Huffington Post Live video offer, calling its performance "really incredible," with solid average view times. Still, " cable dwarfs the Internet" in terms of monthly viewing hours, Armstrong highlighted an opportunity for video sites. "There's still a really, really major consumer need to be entertained."