Few modern companies have been asked to bear the metaphorical burden AOL has: from archetypal Internet success, to abysmal cautionary tale, to unlikely comeback story. At least, Tim Armstrong hopes there will be a comeback story.

Armstrong was brought in to turn AOL around in March, leaving his job as the head of Google's sales team--where he was known, in some circles, as "the most powerful salesman in the world." And he takes over as AOL seeks to extract itself from a cataclysmic merger with Time Warner and in the face of a brutal ad market. "You left arguably the hottest brand on the planet, the most exiting company, the most innovative place to work, for a company that was all those things ten years ago," James Bennet, The Atlantic's editor, noted. Not to mention the fact that AOL is now worth in total about what Google pulls in for a quarter. Why switch?

"Well, the decision doesn't sound very good when you describe it that way," Armstrong admitted. But he liked the move for three reasons: he believes the Internet is still in its infancy, AOL has a "globally known brand" and thus plenty of room for growth, and, on a personal level, he wanted "to do something really difficult." Clearly.



Perhaps the greatest difficulty will be transforming AOL into a "content company"--and one that avoids the pitfalls traditional media has found on the Internet. Producing that content seems to be the easy part. AOL has been busily launching or acquiring a slate of about 80 sites--from TMZ, to Engadget, to Bloggingstocks.com, most without any visible relation to the parent brand. And Armstrong--a former marketing executive at Disney's ABC/ESPN Internet ventures--has said that he sees AOL as the Disney of the future: ruling over a series of independently branded Web properties.

But the problem--ever more pressing--is how to make money off of them. "There's so much content out there chasing not so much advertising," as Bennet put it. Armstrong thinks a huge amount of advertising will soon start flowing onto the Internet. And the key to capturing those dollars will be delivering information that others don't have. "I don't think there's enough content in the world today," he said, "And a lot of the content is the same. There's a lot of subject matter that needs to be covered better."

Will people pay for it? Should the New York Times, say, start charging for its online content? Armstrong conceded that that his attachment to the Times's Sunday Business section was such that he'd gladly pay the year's subscription price for it alone--"they don't charge me enough for that." But he declined to say whether or not The Times should erect a paywall. He also declined to offer specifics about what AOL may charge for in the future--but hinted that they're considering it in some areas. As far as paywalls go, he summed up with a basic axiom: "If I can get it for free, I'll get it for free. But if it's so good and I need it, I'll pay for it."

Among AOL's looming gambles in this regard is what's dubbed "hyperlocal content": sites tailored to the needs of very small constituencies. "We say at AOL that fragmentation is our friend," Armstrong said. To illustrate, he showed a few slides of Patch--a thus-far modest network of free news sites, each focusing on a medium-sized town (mostly in New Jersey). AOL is hiring journalists to cover local sports, town hall meetings, and the like for each town. But, Armstrong emphasized, "The thing you don't see on the surface is that we built a massive structured database underneath and digitized the entire town. When you wake up in Westfield, New Jersey, one day, your entire town is online"--all the town's government agencies, businesses, schools, etc will, ideally, make all their information easily available at one spot. The opportunities for advertisers in such a space seem ample. But AOL has its work cut out figuring out how to lure enough of them to make such an ambitious venture worthwhile.

Armstrong concluded with a story about General David Petraeus, the next speaker on deck. He had stopped the general on the street one day this summer to thank him for the job he's doing. When Petraeus found out that Armstrong had recently taken over AOL--of which he's a customer--he asked: "Well, what's your big idea?"

"Umm...I'm still working on it," Armstrong replied.

At this Petraeus broke out a PowerPoint presentation he had recently prepared about change--specifically about changing the way the military thinks about ideas. He spent 20 minutes taking Armstrong through a "change management" seminar there on the sidewalk. At the end, Petraeus gave him the PowerPoint file. It was signed: "Go AOL! -- General Petraeus."



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