AOL Hints At Further Cost Cutting At Patch

Following layoffs and recent other cost-cutting measures at its local news initiative Patch, AOL’s Brand Group saw improved revenue and a move into positive OIBDA (operating income) in the company’s most recent earnings report.

Chief Financial Officer Karen Dykstra said on the analyst conference call Patch saw cuts in its “lowest performing” areas and in the corporate team in New York City. She also said the company is focused on recent “product enhancements.” At the same time, it sounds like there may be more changes in Patch’s future.

“We continue to look at cost structure and are committed to bringing cost structure down by the end of the year,” Dykstra said. She added that we can expect there to be more partnerships and adjustments in the Patch model, because AOL is committed to having Patch “exit the year at profitability.”

AOL executives also offered some broader comments about the Brand Group (a group that includes TechCrunch, which is owned by AOL). Dykstra emphasized that despite the goal of improving the group’s margins, and despite periodically “scrubbing” the group to see what’s working and what isn’t, AOL is still “happy with the portfolio” and still investing, for example in Huffington Post’s international expansion. Currently, she said the primary brand investment is actually AOL’s homepage.

“You’re seeing healthy margins but also really healthy brands,” said CEO Tim Armstrong. He concluded the call by saying that the company will be focused on “fewer, bigger things” moving forward: “We are going to continue to make very difficult decisions in the business. We’re going to continue to grow.”