AOL Outsources Sports, Health, and Real Estate

AOL CEO Tim Armstrong today announced three new content partnerships which effectively will hand over coverage for sports, health and real estate. The partners are Sporting News, Everyday Health, and for real estate. These will replace AOL’s own properties Fanhouse and AOL Health, whereas AOL Real Estate will remain. (Disclosure: AOL owns TechCrunch).

Armstrong suggested on a conference call that these are not areas that are core to AOL. “The reason we did these deals is because we believe the partners we are working with will be better at doing their core business than we are.” AOL isn’t getting completely out of sports, health, and real estate content. Especially when it comes to local (through Patch) or video, AOL will continue to create videos and articles covering these topics, some of which will appear on the partner sites and some of which will appear in AOL properties.

Outsourcing these content areas is supposed to allow AOL to “double down” on the categories it wants to own, namely local, women, and influencers. Although, health traditionally draws a large female audience, so maybe it’s more of Armstrong cutting his losses and going with the strongest sites.

As far as cost cutting and layoffs go, some Fanhouse employees may lose their jobs, but Armstrong is hopeful that they can be absorbed by Sporting News. The number is to-be-determined and could be anywhere from “zero to dozens.” The brand will continue to exist within Sporting News as part of the deal.

The deals are structured essentially to trade traffic from AOL for content and a revenue-split. “The partnerships are built on our ability to offer the partners traffic. In return for that we are getting content and monetization from the partners,” says Armstrong.

The partnership is a particularly interesting choice, given the past relationship between the two companies back when was called Homestore. Yes, that Homestore, the one that sparked a government investigation after the dotcom bubble because of roundtrip transactions where AOL invested in the company, and then Homestore repaid the favor by buying a ton of advertising on AOL. The former CEO of Homestore was convicted of insider trading (a conviction which was later overturned). The company changed its name to distance itself from the controversy. But that was a long time ago. Still, an interesting choice for a partner.