AOL, once the nation’s leading provider of dial-up Internet access service, recently announced that it was paring its workforce by 10% or roughly 700 people. The bulk of the layoffs will be in the US. Main reasons given for the layoffs were the tight economy, a substantial drop off in advertising revenue and a refocusing of business efforts.
The impact of this round of layoffs on AOL’s products and services are currently hard to predict. The layoffs come roughly 2 years after AOL made a significant downsizing effort and laid off 2,000 employees. Popular Wall Street Journal blog AllThingsD reported, that in addition to the current round of layoffs, “the slashing of staff might go well beyond what has been announced.”
AOL Acquisition Rumours
There have been numerous stories of AOL being an acquisition target for some time. An on-again, off-again dance between Yahoo and Time Warner, AOL’s parent company, has been ongoing. However, the current business climate makes any acquisition of AOL unlikely in the near term
Along the way AOL’s worth has also declined, as seen in the revaluation of the $1 billion investment Google made in AOL in 2005. Recently Google wrote down $726 million of this investment. Instead of the $20 billion valuation that Google’s five percent stake placed on AOL at the time of its original investment, this write-down now values AOL at $5.5 billion.
Web Traffic Comparision: AOL and Craigslist.org
A comparison between AOL and Craigslist.org, the classified ads and forum site is rather interesting. AOL has roughly 6000+ employees (post layoffs) and Craigslist.org has roughly 25 – 30 employees. Yet there are some definite simliarities in the volume of web traffic.
Monthly unique visitors: AOL- 109 million Craigslist – 50 million
Pageviews per quarter: AOL – 54 billion Craigslist – 48 billion
These numbers are gathered from the AOL and Craigslist web sites and are meant only for perspective as this is likely not a true apples-to-apples comparison. However both companies are web-based businesses that rely significantly on web traffic (visitors, pageviews, click through, etc.) for their financial health. The roughly 200 – 1 differential in the number of employees between the companies is interesting at the least. Unless, perhaps, you are an AOL employee.