Aol Is Restructuring, Layoffs And Site Closures Likely

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Aol, owner of TechCrunch, is gearing up for some housekeeping. TechCrunch has learned that the company is preparing to lay off staff and close or fold up underperforming titles as part of a bigger restructuring, aimed at simplifying the company around ad tech, stronger content operations and video. Or, as one source put it to TechCrunch, “stopping things that are not moving the needle while investing in things that are.”

To be clear: while TechCrunch is part of Aol, we on the editorial side are not privy to what happens at a corporate level. We received this info by way of an anonymous tip (as many of our stories begin), and then started to ask around. We have confirmed the following with different sources:

— There will be layoffs but not on a mass scale, we understand (presumably that means less than the hundreds that left the company as a result of the Patch closures). The layoffs will be based around corresponding changes within the Brand group, which is the division housing properties like TechCrunch and Engadget.

— We haven’t yet been able to confirm which sites may get closed or folded into others but sounds like tech and lifestyle sites will be affected.

— The restructuring is likely to happen in upcoming weeks.

Although we haven’t yet been able to pin down exactly which sites might be affected by the changes, in AOL’s portfolio of properties, there have certainly been some ups and downs. Some sites have seen traffic rises in the last year, while others have decidedly not.

ComScore figures, looking at U.S., desktop only traffic, show that recipe/cooking inspiration site KitchenDaily has seen its U.S. traffic decline by nearly 50% in the last year; and Pawnation, a site that publishes videos, gifs and pictures of cute animals, has seen traffic down nearly 60%. In Tech, TUAW is down 30% and Joystiq down 18%.

But desktop-only traffic isn’t everything., Aol’s traffic juggernaut with 41.7 million monthly unique desktop visitors in December 2014, is down on desktop 20% year over year. When you broaden the definition of online success to multi-platform (which you should), HuffingtonPost saw a solid 8% growth this year at 96 million unique visitors in December 2014. (Correction: According to ComScore, HuffPost numbers are up. See note below.)

Moviefone is down nearly 40% on desktop. If the brand is strong enough, it’s far less likely to get touched — especially as the world transitions from reading primarily on desktop to mobile.

There have also been some shuffling chairs in Aol’s content leadership. Susan Lyne, who was hired to run the Brand Group as CEO, left the role after just over a year to start an AOL-backed venture fund, run within the company, focused on funding female-led startups.

In one regard, restructuring should not come as a surprise. In Aol’s Q3 earnings reported in November 2014, CEO Tim Armstrong effectively laid out a plan for a restructuring.

“As we look out to 2015, our strategy and decisions will be driven by the following organizing principles,” he said in his earnings call. “Number one, we’ll focus our capital allocation resource management and management time against scaled assets and platforms. Two, we will organize our asset portfolio around scaled value and scaled growth assets. Three, we’ll simplify everything that can be simplified.”

Later he focused on ways that this could be implemented, noting that the company will look for “an increase in the value and growth of our global content brands by simplifying the portfolio of brands and increasing our share of video and mobile in key content areas.”

Armstrong also noted that AOL’s branded services were going to be “simplified” in the aim of growing subscription revenues. At $196.7 million in revenues in Q3, subscriptions and AOL Membership, where the company’s legacy dial-up business lives (and surprisingly continues to exist despite all the growth of broadband), is the company’s second-largest revenue generator after AOL Platforms, but also the most profitable, at $139.2 million in adjusted income for Q3.

Outside of internal changes at Aol, the company name has been summoned up in the media because activist shareholders at Yahoo are calling for the two companies to join forces, among other demands. One of our sources played this down, however, suggesting this is never something that has come up as a serious topic within Aol itself.

In Q3, Aol reported $626.8 million in revenues, up 12% from a year ago, but its $121.8 million in income fell short of analysts’ expectations.

Update: A HuffPost representative writes in to note “Our US UVs reached 126 million for any HuffPost site in November 2014, which is a new record for our site according to ComScore.” She explains that this number is up 6% from the previous month, and up 30% from November 2013. These numbers reference U.S. visitors to all sites and on all platforms.