Tim Armstrong, CEO of AOL, did a talk at Techcrunch Disrupt. In it, Mr. Armstrong said, inter alia, that AOL was “becoming a house of strong brands” as it transitions to be more of a content company:
He admitted that despite having some dissident shareholders that “don’t believe”, in the content strategy, most of AOL’s shareholders do believe in it.I'm not particularly interested in Mr. Armstrong's claims about what AOL is doing. However, I would like to examine the financials of AOL, especially now that we are all in stock-markety-valuation-y moods given FB's bump. Here's AOL's chart, as of close today, 5/22/12:
So, Mr. Armstrong, it may well be that the shareholders do believe in the current strategy... but they may well be delusional. A PE of 85 on earnings of $30M is just unsustainable for a company with 5,660 employees, and I just do not see that AOL is going to be the company to solve the content-monetization crisis. Incredible to believe that AOL Time Warner was once a hundred billion dollar company.