AOL Leaking People, Too?

One executive departure does not an exodus make, no matter how much the media tries to make a trend out of it.  Still, the WSJ's implication that the recent leap of an AOL bigwig to the VC firm Mayfield is the result of AOL's poor prospects and Time Warner's endless dithering over the fate of its most infamous division does not seem far-fetched. 

As suggested here, one of the challenges AOL and MSN face, as they try to remain relevant in a world dominated by multi-billion-dollar, laser-focused pure-plays, is retaining their best people.  When such folks can go out and potentially make tens, hundreds, or thousands of millions of dollars from stock options at an inspiring Internet company hell-bent on changing the world, or tens of millions in cash at a VC firm funding dozens of such companies, what, exactly, is the motivation to toil away in relative obscurity for relative peanuts in one operating division of a massive global conglomerate focused on another business (old media, PC software)?   

Yes, all this will change if the world ends again.  But when, exactly, is that going to happen?  And how many more billionaires will be created in the meantime?  If AOL and MSN remain shackled to their parental behemoths the best their employees can hope for will be generous helpings from the annual bonus pool and pats on the head from senior managers whose real priorities are elsewhere.  If they parachute to the right start-up, however, or even to a promising established pure-play?  Well, let's just say it's a lot easier for a $100 market value to jump 10- or 100-fold than a $100 billion market value.  And you also get the added bonus of not having to deal with their requisite infighting, entitlement, denial, and politics of legacy businesses.   

Comments

[Dana Mauch, Jr.]

Your point is interesting re the future of MSFT. Do you feel they made a mistake by not purchasing Skype? I would think this could be huge for them, exploitable more to their benefit than ebay.

[eric]

i wouldn't mind having Windows and Office as my "Legacy Businesses"

[Henry Blodget]

Yes to the first (I thought Skype would have been a better fit for Microsoft than eBay).

And YES! YES! YES! for not minding having Windows and Office as legacy businesses. And, in truth, in this case, they are not so much "legacy" businesses as different businesses, because they are not being cannibalized. But they also don't really qualify as growth businesses, at least not relative to the growth of Google, et al. (Which is hardly Microsoft's fault. When you're already pulling down $15+ billion in operating income, it's hard to grow fast).

[Network]

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