Money Matters, Simplified.
AOL acquires Patch Media Corp. and Going Inc., goes local
by Jamie Anderson - June 12, 2009 - comments
AOL has made its first acquisitions ever since the former Google advertising chief, Tim Armstrong, assumed office as the chief executive officer of the beleaguered Internet company
New York, June 12: Patch Media Corp. and Going Inc. are now a part of AOL’s repertoire. Time Warner Inc.'s (NYSE: TWX) AOL acquired the two online media companies and moved a step closer to fulfilling its objective of consolidating its position in the fast-growing local online advertising market.
AOL’s shopping binge comes at a time when the parent Time Warner is looking to split it off into an independent company. To this end, AOL’s newly appointed chief executive officer, Tim Armstrong, is working purposefully on building a new organization structure.
The strategy
Elaborating on the company’s strategy, Armstrong said, "Local remains one of the most disaggregated experiences on the Web today--there's a lot of information out there but simply no way for consumers to find it quickly and easily. Going forward, local will be a core area of focus and investment for AOL.”
Armstrong said of the purchases that are priced at less than $10 million each, “The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what's going on in their neighborhood."
AOL, in addition to its focus on local market, is also looking to expand the advertising business and the communication business, with focus on email and instant messaging services. It is for this reason that AOL acquired the social networking site Bebo last year.
Armstrong said of the huge plans the company has, “Our vision isn't just about optimizing what we have, it's about overhauling how we approach this space, drawing on our legacy of connecting communities.”
Lure of the local
AOL is not the only internet company trying to enter the fray. Others are also making resolute efforts to break into the local online ad market. In fact, MySpace struck a deal with IAC/InterActiveCorp's (NASDAQ: IACI) Citysearch to team up on a local business venture earlier this year.
IAC’s CEO Barry Diller tends to agree with Armstrong. He termed the local advertising arena "one of the few areas that hasn't been colonized" on the Web.