26 Jul
AOL to shut down Xdrive, other services
AOL will phase out several online services as the Time Warner one continues to struggle in its transition from a business model based on subscription fees to one based on advertising revenue.
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AOL will put out to pasture-ground Xdrive, a hosted-storage service in favor of individuals; AOL Pictures, a photo sharing and management site; and Bluestring, designed for sharing photos, music and videos, according to each internal memo obtained by technology news site TechCrunch.
In the memo, AOL Executive Vice President Kevin Conroy said these and mobile services AIM World and MyMobile will be “sunset” because they haven’t gained enough favor. A source close to AOL said the leaked memo is legit and that it was intended solely for Conroy’s team.
AOL’s popularity problem among end users and advertisers seems widespread, judging by the anemic growth AOL achieved in advertising revenues in the first quarter: 1 percent, when compared with the same quarter last year.
AOL has been on a years-long shift away from its traditional employment, based steady charging people for dial-up Internet access service and for uncharitable online satisfy. It has been trying to move to a representation based adhering online advertising, which has been experiencing strong development in the past five years.
However, while other thing of its services are undeniably popular, like its AIM instant messaging, AOL has failed to develop innovative services in growth areas, resorting to acquiring or creating many “me-too” services in markets where dominant players are already entrenched.
For example, AOL Pictures, its original photo upload and economy service, couldn’t compete against more technically advanced competitors analogous Flickr, which was founded in 2004 and acquired by Yahoo the following year. Meanwhile, Bluestring seems very similar to much more popular services like Photobucket, Slide and RockYou.
Unable to gain an border through technical innovation, AOL has been investing heavily on acquiring advertising service providers like Advertising.com, Tacoda, Third Screen Media, Quigo, Lightningcast and AdTech, hoping to prize a piece of the action that way, but that military science doesn’t seem to be working too well either.
In its first-quarter earnings announcement, Time Warner stated that AOL’s ad business had done well in sales to external sites and in paid search, but that it had been afflict by a decline in display ads.
AOL’s ad revenue improvement fell way in the present life the U.S. rate. According to the Interactive Advertising Bureau (IAB), U.S. online ad revenue grew 18.2 percent in the first quarter.
This is the latest trimming of online services at AOL, which last year eliminated about 50 of them, as the company has become much more selective about maintaining barely products that directly support the online advertising strategy, the source said.
AOL will examine to sell Xdrive, AOL Pictures and Bluestring so that existing users of those services will subsist able to transition to a new provider, but if no buyer is found, the products will be shut down by the end of the year, according to the fountain-head. well.
If the services are closed, AOL plans to one or the other burn close users’ content into CDs and DVDs and send it to them or walk them through how to save the photos, videos and other media to local hard drives, the source said.
According to the memo, AOL also plans to involve its Video Portal with its AOL Programming Video Experiences by the beginning of the fourth quarter, as well as try to boost the online ad revenue generated by the AOL browser toolbar, desktop software, Webmail service and Truveo video search engine.
Xdrive alone became to be turned to account to Mac users five months ago, while AOL released Xdrive Desktop Lite.
