Would you let Obama run your company? I bet if you asked all 500 of the Fortune 500 CEOs that question, off the record not a single one would say yes.
So when I learned that AOL was being sold, I thought, “Here’s what would happen if Obama ran a company.”
Back in the day in what was called “the new economy,” upstart AOL bought Time Warner, the mighty media giant, for $165 billion in 2000. That was and remains one of the biggest deals of all time. Yet, a mere fifteen years later, Verizon is preparing to acquire AOL for a paltry $4.4 billion.
How do you go from buying companies for $165 billion, to being sold for “Carters”…peanuts?!
AOL was the de facto way to get online, the “onramp” to the internet. That iconic dial-up icon is barely a memory for most people, and it was a string of missteps that sealed its fate.
What’s left of AOL is a hodgepodge of online advertising, a mere shell of its former self.
AOL made deal after deal, overpaying for acquisitions with no integration strategy or end game. The company bought mostly small web companies at first, but then their appetite grew to bigger debacles.
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AOL bought a rival CompuServe, and the owner of the Internet messaging service ICQ in nine-figure acquisitions. Still hungering for more, AOL upped its game, doing billion-dollar deals in 1998 when it bought Netscape for $4.2 billion.
Two years later would come the takeover of Time Warner, which to this day remains the poster child of the dot-com era deal-making delusion.
I can easily see Obama making all these mistakes.
Following the Time Warner deal, AOL never again struck a multi-billion-dollar acquisition, but it did continue its folly of smaller worthless acquisitions, like the purchase of Weblogs in 2005.
Eventually the company was forced to spin off its crown jewel acquisition Time Warner, into a separately traded company in order to refocus on the existing lunacy of having no real plan.
The next brilliant moves brought the tech blog TechCrunch in 2010, and The Huffington Post, for $315 million into its portfolio. That worked out so well, that AOL eventually sold other assets, including a plethora of patents to Microsoft for more than $1 billion.
If Obama ran a company, AOL would be it. Except you might call it “America Offline”.