AOL’s woes deepen; bring me the head of Richard Parsons

7 08 2007

A long time ago in a galaxy far, far away AOL once had 30 million subscribers… today it has 10.9 million.

The company failed to predict consumer appetite for broadband, that the internet and walled gardens don’t go together, and it was as late as last year that AOL finally began the move from subscription to ad-funded access to its content.

At a time when advertising $$$ are pouring into online, AOL’s results are heading south again. Onlookers thought the rot had stopped last quarter, when the company posted a 40% gain in online ad revenues; yet three months later this has more than halved.

On the plus side, the company has reported an increase in page impressions, for the first time since 2005.

CEO Dick Parsons statement reads as more of an apology than a tease of the company’s prospects: “We remain confident we’re on the right track,” he told investors, adding without a tinge of irony, given the latest set of numbers: “AOL is in fact reasserting itself as a leader in the online advertising space.”

Parsons claims the company is playing the long game: “We don’t manage this company for the guidance. We manage this company according to the business imperatives and for the long-term growth and sustainability of our business.”

We’ll see…