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At 25, AOL switches tracks: Creating content, not just connecting users

Marking its silver anniversary, the company looks to reclaim its standing among Internet giants.

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By Michael S. Rosenwald
Washington Post Staff Writer
Monday, May 24, 2010

A few weeks ago, as Steve Case was flying above Sterling, en route to Dulles International Airport, he looked down and saw the sprawling campus that is home to the company he co-founded 25 years ago this month -- the pioneering service that took millions of people online for the first time.

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"Always weird to fly over AOL's headquarters," Case tweeted not long after landing. "Time flies."

He attached to his tweet a photo of the impressive campus -- the Internet has blossomed far beyond "You've got mail!" -- but AOL these days fills only a little more than half of its original 1.2 million-square-foot Virginia home. Several of the buildings were recently leased to Raytheon, a defense contractor. Key AOL executives have moved to New York.

On Monday, as the company competes for a place in the Internet's future, AOL will look back, naming some of its remaining properties in Sterling after three key executives who built the firm: Case, Ted Leonsis and James V. Kimsey. The three titans left AOL either before or after its disastrous merger, valued at more than $160 billion, with Time Warner.

"The AOL brand has one of the biggest legacies in terms of what has changed the world in the last 50 years," said Tim Armstrong, a former Google executive who was named AOL's chief executive in March 2009.

But AOL, which is once again independent, having spun off from Time Warner last year, is trying to look ahead, searching for a footing in a world of blogs, social networking, targeted ads and tweets from airplanes. Some industry observers openly wonder whether AOL -- for so long associated with the oh-so-'90s screeching sound of dial-up Internet connections -- can survive in a broadband world dominated by Google, Facebook, Microsoft and Yahoo.

Inside AOL's campus, where remnants of the go-go dot-com days still dot the hallways -- foosball table here, massage chair there -- employees say an unusual culture is taking hold: A big company with $262 million in the bank and such perks as on-site day care is trying to adopt the stay-late work ethic of a start-up, albeit one where the average employee age is 35, not 22. These days, the slogan on signs around campus urges workers to "Beat the Internet" -- that is, to surpass AOL's dominance of the Web in the 1990s.

AOL is quietly receding from its old subscriber model -- 35 million Americans got Internet service from AOL in 2002, but fewer than 5 million do today -- yet the company is reaching far more people through its content, which Nielsen ratings say attracts the seventh-largest audience of any Web brand.

"A lot of us are here now for the turnaround," said Amy Craig, a product manager who works on AOL's social networking applications, such as AOL Instant Messenger. Craig said she recently turned down job offers from other big tech firms. And she no longer cries at home after big meetings. "I'm happy again," she said.

Craig, one of about 5,000 employees remaining after buyouts and layoffs slashed AOL's workforce by a third over the past six months, is getting behind an audacious goal: AOL wants to be the biggest newspaper (and magazine and TV network and movie theater) on the Web, creating millions of pages of news, reviews, statistics, how-to guides -- any content around which it can sell ads.

It has created or bought some of the most popular sites on the Web: Engadget.com, for gadget geeks; PoliticsDaily.com, for politicos; FanHouse.com, for sports nuts; DailyFinance.com, for business news; and even MMAFighting.com, for fans of the world of professional fistfights.

The AOL brand barely appears on any of these sites, an approach AOL executives confidently compare to Disney's unbranded ownership of ABC, ESPN and Miramax. The idea is to let each of the smaller, targeted brands create its own relationship with consumers.


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