Digital Media

Sites owned by Yahoo, AOL, and Google have joined Facebook and MySpace in expelling New York sex offenders from their rolls.

New York Attorney General Andrew Cuomo announced Thursday that Google's Orkut.com, AOL's Bebo.com, and Yahoo's Flickr.com are among 13 additional social-networking sites to use sex offender data available through New York's Electronic Securing and Targeting of Online Predators Act (E-Stop) to find and disable accounts associated with registered sex offenders.

Other companies that have agreed to cooperate include BlackPlanet.com, Classmates.com, Flixster.com, Fotolog.com, hi5.com, MyLife.com, Stickam.com, and Tagged.com.

New York Attorney General Andrew Cuomo

(Credit: NY Attorney General's Office)

There are still some holdouts. Cuomo called on other sites, including Friendster.com, Buzznet.com, eSpin.com, Habbo.com, and LiveJournal.com, "to commit to using the list." He urged parents and children to consider not using sites that haven't complied.

On December 1, Facebook and MySpace deleted the accounts of more than 3,500 sex offenders based on the New York law.

By comparing this data with their own user roles, Facebook was able to identify and delete 2,782 registered sex offenders. MySpace deleted 1,796 accounts.

In addition to deleting the accounts of any known registered sex offenders, the companies will turn over information about the accounts to law enforcement officials.

In a statement, Cuomo said: "It is no secret that sexual predators abuse social networking websites to find and manipulate victims and to insinuate themselves into their victims' lives."

The E-Stop law, which was passed in 2008, requires registered sex offenders from New York to disclose their online identities to officials. Information must include e-mail addresses, instant-messaging screen names and social-networking account names. The law also requires the state's Division of Criminal Justice Services to release state sex offender Internet identifiers to social-networking sites and other online services so that they can prescreen or remove individuals who match the list. It also imposes restrictions on sex offender's use of the Internet if the victim was a minor and if the Internet was used to commit the crime. Restrictions include banning the offender from social-networking sites, as well as prohibiting access to online pornography or communicating with anyone with the intention of promoting sexual relations with a minor.

Cuomo is one of several state attorneys general who have expressed concerns about the danger of Internet predators. In 2008, Cuomo and 48 other attorneys general entered into an agreement with MySpace that resulted in the Internet Safety Technical Task Force, whose report concluded that the actual threat of predators is less than many had feared and that kids are far more likely to be harmed by bullying and harassment from other youth. I served on that task force as a representative of ConnectSafley.org, a nonprofit Internet safety organization I help operate.

The new AOL.com.

As promised, AOL turned on its redesigned homepage Thursday in conjunction with CEO Tim Armstrong's ceremonial ringing of the New York Stock Exchange opening bell. The company formally spun off from parent company Time Warner this week and is now traded publicly, and to commemorate the media-centric rebirth, it enlisted branding agency Wolff Olins to give it a spiffy new look.

Wolff Olins describes the rebranding as "deliberately disruptive and deliberately unlike what is being done by other online media businesses...designed for an environment where media is no longer broadcast, but rather is discovered through fragmented, non-linear conversations." Deep.

'Will you be my friend?'

(Credit: AOL)

Well, the new AOL.com looks pretty much the same as the old AOL.com, except that in addition to the new logo, I'm given the option to navigate through "themes" featuring various drawings and photos. Conveniently, the color scheme of the page changes to match the selected image. By default, I was offered an adorable smiling blue monster peeking out at me from behind all that shiny content that AOL believes will save not only its brand, but the entire beleaguered media industry.

The same fuzzy monster image was hanging on a massive banner outside the New York Stock Exchange on Wednesday night, when AOL invited employees, advertising and marketing types, and the occasional celebrity (OMG! P. Diddy was there!) to a glitzy party on the trading floor (in which a significant amount of financial-industry machinery was likely in grave danger of being damaged by splashes from liberally mixed cocktails or rogue bits of sushi rice).

Really important question: What is the monster's name? I'm sure someone internal at AOL or Wolff Olins has come up with a nice nickname for the happy little fellow. Or perhaps this is a matter of major corporate dissent within the new AOL--it's not like we didn't know they'd have some big challenges right out of the gate.

What's old is new again on the Internet.

As AOL spins out from under the historic but disastrous Time Warner deal, it will find itself up against an old foe: Yahoo. Both Yahoo and AOL are attempting to shed their legacies as old-school Internet companies snowed under by the rise of Google by turning themselves into Internet destinations. Long live the portal.

Although the companies have never really stopped competing, things are certainly different this time around. Yahoo is arguably in the better position, with more resources and traffic surrounding its media properties as well as healthy e-mail and instant messenger usage that drives traffic to those properties. AOL is fighting uphill, with an e-mail domain that evokes retirement communities and much of its content strategy revolving around a project that solicits writings and photos from freelancers.

But with traditional advertisers finally starting to show tepid interest in Internet display advertising, there is likely some room for AOL at the table. Expect the two companies to run to different ends of the market, with Yahoo pushing its sites as high-quality, professionally run havens for major advertisers, and AOL stressing its reach and ability to target niche audiences.

On Thursday morning, as AOL began trading on the New York Stock Exchange, its shares were down about 2 percent to the vicinity of $23.25. Yahoo's shares stayed essentially flat, at around $15.30.

AOL's content plan revolves around a combination of professional writers and editors and crowd-sourced content. It launched Seed.com as a Web clearinghouse for the freelancers of the world to submit content in hopes of seeing it featured on AOL's sites, and hired New York Times writer Saul Hansell to oversee the project.

AOL CEO Tim Armstrong plans to direct that editorial operation with technological prowess, analyzing hot topics on the Internet and planning coverage around the zeitgeist. It's not as novel an approach as some may think: Internet news organizations of all shapes and sizes make coverage decisions based on how readers respond to certain topics.

But it does indicate that AOL plans to go after the same space as Yahoo. Both companies are attempting to turn themselves into sources of original content that is both compelling to both the masses and the critics, not to mention the advertisers.

AOL CEO Tim Armstrong

(Credit: Google)

Yahoo is currently trying to increase the amount of content it produces in-house, which hovers around 20 percent at the moment, depending on which part--Yahoo News, Yahoo Sports, Yahoo Entertainment, or Yahoo Finance--you're examining. The rest comes from content partners and wire services.

AOL, on the other hand, already produces around 80 percent of its own content. "I think when you own and are able to operate that content, the advertisers actually are very attracted to it," Armstrong told CNBC on Wednesday.

While that may be true, advertisers also like eyeballs. For the most part, Yahoo's properties are No. 1 or 2 in their respective fields, while AOL has a few winners in sites like Engadget and Moviefone but otherwise trails by a significant margin in those categories. Overall, Yahoo operates the second-largest group of Web sites in the U.S. with 158 million unique users, trailing only Google. AOL's network is the fourth-largest in the U.S. with 98 million unique users, according to ComScore.

AOL thinks it can offset that advantage by becoming the best content provider in a number of niche categories and then selling advertisers on the benefits of targeting that niche. "As the Internet becomes more fragmented, when--if--you can produce great content in niche areas and then really leverage the distribution on the Internet, you're looking at a very high scale, high ROI, return-on-capital business," Armstrong said in the same interview with CNBC.

It's not clear whether Armstrong has dialed up a winning strategy as he prepares to take one of the pioneering companies of the Internet back out on its own. He is, however, facing much more competition than the last time AOL was trying to make a content business on its own, and unlike that last time, he can not depend on a growing source of revenue from Internet access accounts.

Story updated at 7:00 a.m. PST with Thursday morning stock movement for AOL and Yahoo.

Some looks at the new AOL branding.

(Credit: AOL)

It's the media equivalent of moving out of your parents' house, heading to the nearest tattoo and piercing parlor, and yelling FREEEEEEDOM!: AOL has unveiled the "new brand identity" for its post-Time Warner era, slated to begin December 10 when it begins trading on the New York Stock Exchange as a separate company. And there's nary a blue triangle in sight. Instead, there's a plain new text logo presented with various backdrops, from cartoon scribbles to a rock-star hand symbol to a totally adorable goldfish.

The company is currently offering just a preview, and says in a release that a full unveil will come on the spin-off date. Yay, secrets! I love secrets! But we, of course, have many hints: like the fact that CEO Tim Armstrong, who joined the company in March after a long stint as a high-profile Google sales executive, keeps talking up AOL's future as a powerhouse in digital content and publishing. The company's array of niche blogs, which were hatched when AOL purchased Weblogs way back in 2005, are now its centerpiece.

So the new mood? "It's one consistent logo with countless ways to reveal," the release explained. Ooh, sexy!

The release also included a soundbite from Karl Heiselman, CEO of Wolff Olins, which AOL enlisted to help with the transformation: "AOL is a 21st century media company, with an ambitious vision for the future and new focus on creativity and expression, this required the new brand identity to be open and generous, to invite conversation and collaboration, and to feel credible, but also aspirational."

Of course, it's not all sunny: The company is on the verge of significant layoffs, as well as the possible chucking of non-"content" properties like ICQ and MapQuest, as the spinoff date grows closer.

Whatever. Isn't that goldfish cute?

Yesterday, BoomTown wrote about AOL's efforts--including hiring investment bankers--to sell its ICQ instant-messaging unit.

But that's probably not going to be the end of the shedding of assets at the online site.

In fact, according to sources inside and outside AOL, one of the next candidates for sale could be its MapQuest online map service.

Purchasers of the service that provides mapping and directions, sources said, are likely to be other mapping giants, especially Microsoft.

But it is not clear if the software giant or anyone would fork over a huge sum of money for MapQuest.

That would include the $1.1 billion in stock that AOL paid for MapQuest in 1999.

AOL is set to spin itself off in less than a month from corporate owner Time Warner, and sources said selling off peripheral properties is part of becoming a smaller, more focused company.

MapQuest, like AOL's Bebo social-networking site, fits this description.

While it does have widespread distribution across the Web, reaching over 40 million users monthly, MapQuest lags well behind aggressive efforts being pushed by both Microsoft and Google.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

AOL, which has already told investors that it will spend up to $200 million firing a good chunk of its staff, has now told its employees. It is looking for "up to 2,500 volunteers," CEO Tim Armstrong told his staff Thursday. That's a third of the company's payroll.

The voluntary layoff program begins December 4, a few days before the company spins off from Time Warner. If AOL doesn't get enough volunteers, it will ax people on its own.

This is lousy news for employees, who are faced with a "jump now or wait to be pushed" decision, but it is designed to cheer investors: AOL says the cuts will drop its annual operating expenses by $300 million. Through the first nine months of this year, AOL's operating expenses ran around $1.8 billion.

Meanwhile, AOL is looking to shed some parts of its business altogether. It has hired bankers to sell off its ICQ messaging service and is considering dumping MapQuest, among other assets.

Armstrong's (expensive) goodwill gesture: He is giving up his 2009 bonus, which was to be at least $1.5 million. His explanation to employees: "As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forgo my 2009 bonus. That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."

Here's the text of the company's filing with the SEC:

On November 19, 2009, AOL Inc. (the "Company") informed its employees of proposed restructuring activities as part of its continuing cost reduction initiatives aimed at aligning the Company's organizational structure and costs with its strategy (the "Restructuring"). The Restructuring is conditioned upon the successful completion of the Company's previously announced spin-off from Time Warner Inc. (the "Spin-off"), as well as the approval of the Company's new Board of Directors that will begin service in connection with the Spin-off. It is anticipated that, if approved, the Restructuring will include the reduction of approximately a third of the Company's current employee base, which will be conducted on a voluntary and involuntary basis. The goal of the Restructuring is to reduce ongoing annual operating costs by approximately $300 million. If the Restructuring is approved, the Company expects to incur restructuring charges of up to $200 million, substantially all of which is expected to be incurred from the date of the Spin-off through the first half of 2010.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

AOL will officially be spun off from Time Warner on December 9, with trading to begin the next day.

Shareholders of record at 2 p.m. PST on November 27 will get one share of AOL for every 11 shares of Time Warner on the day of the long-expected spinoff of the Internet service.

At Time Warner's current market cap of $38 billion, that gives AOL an implied value of $3.2 billion--a fraction of Google's $20 billion valuation of the portal in 2005, when it invested $1 billion in the property. And it's even lower than the $5.5 billion valuation Google gave the company last January, when it wrote down its investment.

(Credit: All Things Digital)

AOL will trade on the New York Stock Exchange as "AOL."

Ironically, before it merged with Time Warner at the dawn of the new century, AOL previously traded on the NYSE.

AOL went public on Nasdaq on March 19, 1992, under the ticker "AMER," and moved to the NYSE on Sept. 16, 1996, trading as "AOL."

(Fun fact: BoomTown actually attended both the fancy dinner the night before AOL moved to the NYSE from Nasdaq and the AOL party on Wall Street the next day.)

If you want to get really technical, AOL common stock will begin trading on a "when-issued" basis--you really don't want to know the confusing regulatory details of why--on the NYSE under the symbol "AOL WI" beginning on November 24.

On December 10, when-issued trading of AOL common stock will end and "regular-way" trading under the symbol "AOL" will begin.

After that, it will be up to CEO Tim Armstrong to make the long-suffering AOL into the little Internet company that could.

The separation of AOL and Time Warner is also symbolic, dismantling the most potent symbol of Web 1.0, when AOL essentially got control of the media giant, only to see the merger crash in disaster.

If at first you don't succeed...

Here's the full Time Warner press release on the transaction:

Time Warner Declares Spin-off Dividend of AOL Shares

Record and Distribution Dates and Final Distribution Ratio Announced

NEW YORK-(BUSINESS WIRE)-Nov. 16, 2009-Time Warner Inc. (NYSE:TWX) and AOL Inc. today announced the timing and details regarding the spin-off of AOL from Time Warner.

The Time Warner board of directors has approved the final distribution ratio and declared a pro rata dividend of the shares of AOL common stock owned by Time Warner that will result in the complete legal and structural separation of the two companies.

On the distribution date of December 9, 2009, Time Warner stockholders of record as of 5 p.m. on November 27, 2009, the record date for the distribution, will receive one share of AOL common stock for every eleven shares of Time Warner common stock they hold.

Fractional shares of AOL common stock will not be distributed to Time Warner stockholders. Instead, the fractional shares of AOL common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in the form of cash payments to Time Warner stockholders who would otherwise be entitled to receive a fractional share of AOL common stock.

No action or payment is required by Time Warner stockholders to receive the shares of AOL common stock. Stockholders who hold Time Warner common stock on the record date will receive a book-entry account statement reflecting their ownership of AOL common stock or their brokerage account will be credited with the AOL shares. An Information Statement containing details regarding the distribution of the AOL common stock and AOL's business and management following the AOL spin-off will be mailed to Time Warner stockholders prior to the distribution date.

The AOL spin-off has been structured to qualify as a tax-free dividend to Time Warner stockholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will be taxable. Time Warner stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the AOL spin-off.

Shares of Time Warner common stock will continue to trade "regular way" on the New York Stock Exchange ("NYSE") under the symbol "TWX" through the distribution date of December 9, 2009, and thereafter. Any holders of shares of Time Warner common stock who sell Time Warner shares regular way on or before December 9, 2009, will also be selling their right to receive shares of AOL common stock. Investors are encouraged to consult with their financial advisers regarding the specific implications of buying or selling Time Warner common stock on or before the distribution date.

AOL common stock will begin trading on a "when-issued" basis on the NYSE under the symbol "AOL WI" beginning on November 24, 2009. On December 10, 2009, when-issued trading of AOL common stock will end and "regular-way" trading under the symbol "AOL" will begin. The CUSIP number for the AOL common stock will be 00184X 105 when regular-way trading begins.

Time Warner and AOL have entered into a Separation and Distribution Agreement and several other agreements related to the AOL spin-off. The completion of the AOL spin-off is subject to the satisfaction or waiver of a number of conditions, including the Registration Statement on Form 10 for the AOL common stock being declared effective by the Securities and Exchange Commission ("SEC"), the AOL common stock being authorized for listing on the NYSE and certain other conditions described in the Information Statement included in the Form 10 and in the agreements filed as exhibits to the Form 10. The condition relating to the authorization of the AOL common stock for listing on the NYSE has been satisfied, and today AOL sent a letter to the SEC requesting that the Form 10 be declared effective. Time Warner and AOL expect all other conditions to the AOL spin-off to be satisfied on or before the distribution date.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Time Warner reported on Wednesday lower sales and earnings for its third quarter, with a drop in revenue across virtually all segments, including AOL.

Sales for the quarter dropped 6 percent to $7.1 billion from $7.5 billion in the year-ago quarter. Earnings fell to $661 million, or 55 cents a share, compared with $1.1 billion a year ago. Adjusted earnings per share was 61 cents, compared with analyst expectations of 53 cents, according to Thomson Reuters.

Time Warner also increased its full-year earnings per share outlook to at least $2.05. Previously, Reuters reported, the company had said the full-year figure would be similar to last year's $1.98 a share.

The company saw growth in its Networks unit, which includes Turner Broadcasting and HBO, with revenue climbing 5 percent to $2.9 billion. But sales fell in all other segments.

Lower movie ticket sales brought down revenue by 4 percent in the Filmed Entertainment division, while a decline in magazine subscriptions cut revenue by 18 percent in the Publishing segment.

Results were also weak at struggling AOL. The number of subscribers fleeing the service increased, while ad revenue decreased, contributing to a 23 percent drop in quarterly sales.

Time Warner sales fall in the third quarter. The figures above are in millions of dollars.

(Credit: Time Warner)

Back in May, Time Warner announced that it would jettison AOL by the end of the year, a goal that Time Warner CEO Jeff Bewkes reiterated Wednesday. AOL will spin off into a separate company led by former Google ad exec Tim Armstrong, who was appointed AOL's CEO in March.

The 2001 union between Time Warner and AOL never quite coalesced. AOL was supposed to be the high-tech jolt that would transform Time Warner. But almost from the start, AOL underperformed, running into financial setbacks less than a year after the merger.

As the Internet continued to take off, subscribers realized they didn't need AOL to hop onto the information superhighway. By the end of 2003, losses had mounted, many of the key players in the deal had left, and Time Warner had dropped AOL from its name.

Though Time Warner has been dragged down by most of its underperforming segments, especially its publishing division, the company is still hoping for a brighter future without AOL.

In preparation for its upcoming spin-off from parent company Time Warner, AOL has named nine members to its board of directors--and from what it sounds like, more additions to the board could be coming.

The current lineup includes former Amazon Chief Information Officer Richard Dalzell, Plainfield Asset Management partner Karen Dykstra, financial services exec William Hambrecht, Paley Center for Media Director Patricia Mitchell, former FCC Chairman Michael Powell, former CBS Chief Financial Officer Fredric Reynolds, former Procter & Gamble exec James Stengel, and ex-William Morris Agency CEO James Wiatt.

"AOL is very fortunate to have an exceptional group of proven leaders to serve on our board of directors," CEO Tim Armstrong, who took over the reins of the company this spring, said in a release. "AOL is on a mission to help create the future of media and content and the AOL board will play a central part in helping us focus the strategy and also operate the company with the highest ethical standards."

The majority of the board members don't hail from Armstrong's own Silicon Valley turf: the CEO served as Google's director of sales up until his hire at AOL. But most of them are veterans of traditional media, which presumably will give the onetime dial-up king an advantage as it attempts to shape itself into a digital-content power player--at least on the surface.

(Disclosure: One of AOL's new board members has a past affiliation with CBS Corp., which publishes CNET News.)