Digital Marketing and Technological Insight

TechCunch is saying that that the off-again / on-again merger talks between Yahoo and Time Warner’s AOL are on-again and the deal could go through as early as this month. The deal has been talked about for the better part of this year and it makes as much sense as ever for both struggling companies. Time Warner has been dieing to get rid of AOL since the 2001 deal completely bombed. Yahoo, who has fought off Microsoft and has been in panic mode ever since, is looking to make some sort of blockbuster deal to give shareholders some confidence and hope. The actual details of the deal are yet to be known, but If the merger of Yahoo and AOL does goes through it would involve Yahoo getting all of AOL except their dial-up business (why hasn’t Earthlink bought this yet?).

Here is why I think the deal would be great for both companies. First, AOL has a laundry list of tremendous web properties that the far superior Yahoo Ad Platform could better monetize. Secondly, the integration of Yahoo & AOL mail / AIM & Yahoo Instant Messaging can not be underestimated - add the web properties with the web services and you are talking about a lot of eyeballs.

If this deal does go through, I would suggest Yahoo sell of its search business - get out of that losing battle and focus on web property and services  monetization. Let Microsoft / Google battle for search share while Yahoo can start to dominate everything else.

Remember when AOL.com was exclusive territory for all things AOL related? Well, those days - just like 56k dial-up - are a thing of the past. Yesterday a new AOL.com homepage launched that, among other things, allows users to access competing services. The redesigned AOL.com now includes integration of outside email services (Gmail, Hotmail, Yahoo Mail), external bookmarks, social network integration (Facebook and MySpace) and automatic personalized content.

AOL also added a link within the main navigation to Bebo, the social networking portal they bought for $850 million. I am a bit confused as to why they didn’t integrate Bebo more into the new AOL.com. To me it seems as though integrating some of Bebo’s social elements into the site would have created the stickiness they were looking for - and of course drive more usage to Bebo. I am assuming this will happen in phase 2 of the re-launch.

The new design is the latest effort by AOL to kick-start their web efforts and regain the prominence they used to have back in the dial-up days as the first and only stop for millions of online users. AOL.com still generates significant traffic but has long been an after-thought when compared to other portals and online destinations like Yahoo.com, Wikipedia.org or MSN.com.

The bottom line is that the new AOL.com is better and I am a huge fan of getting away from the “walled garden” approach AOL was long known for. However, AOL.com misses the mark on various areas, including better integration of other AOL content properties and services. I am also disappointed when it came to advertisements - basically I think they could have done a better job with the inclusion of bigger, more eye-grabbing, display ad placements. The new AOL.com continues to focus on the smaller “sponsored by” and “featured” spots throughout the content of the pages. These niche revenue opportunities are all well and good but in a iffy ad market, AOL should be focusing on better ad integration marketing efforts.

Along with the new AOL.com, AOL also launched various niche web properties in an effort to further expand their ad inventory.