How does AOL make money
AOL wants to become a portal
AOL relaunched its US homepage yesterday, Wednesday. This is intended to regain lost users. A year ago, the Internet giant was able to welcome almost 114 million unique users in the USA, this year it was a good two and a half million fewer. Instead of continuing to serve as a repository of information, they rather want to act as a gateway to the rest of the network. The heart of the new pages will be that users will also have access to the e-mail accounts of Google, Yahoo and Hotmail via aol.com. In addition, AOL, like the mail order company Amazon, will memorize the surfing habits of its users. So if someone looks at business reports frequently, then in future these will be presented to them on the home page, according to the concept.
AOL's great hope behind the relaunch is to be able to position itself as a networker between individual websites and thus generate more traffic on its own site again. In addition to an increased number of unique users, it is hoped that users will stay longer on the site. Updates for popular social networks such as Facebook, which can be downloaded from the AOL homepage in the future, should contribute to this. "With this new email service, our company will be the first among traditional portals to offer a centralized email experience," said Bill Wilson, AOL's executive vice president of programming. "We know that consumers today have multiple email accounts with different providers and we want to make them easier for them to process."
However, it remains questionable whether the hoped-for increase in traffic can also generate advertising revenues. Although the US advertising market grew by 20 percent in the second quarter, this increase is mainly due to so-called search ads. According to analysts, Search Ads will earn more than ten billion dollars this year, but not even half that with classic advertisements (display ads). But AOL has been relying on this form of advertising for years. It is therefore not surprising that the advertising revenue of the former industry leader grew by only 1.5 percent in the past quarter, after having even had to accept a decline in sales in the four previous ones.
"It is very important that AOL now manages to get its advertising problems under control," said Michael Nathanson, an analyst at Bernstein Research. "The problem is not the traffic, but that AOL is making too little money." AOL's parent company Time Warner recently announced that the Internet company would create the turnaround in the second half of the year. In order to achieve this, the new site will not only feature classic banner and display advertising spaces, but also prominently placed photo galleries and video players in which interactive advertising can be placed. (pte / mja)
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