Another "Doh!" Award: Time Warner's Wayne Pace

At least one senior Time Warner manager probably has more on his mind than AOL.  According to the Post, an alleged New York high-end madam has fingered TW CFO Wayne Pace as her sugar-daddy.  The Post article is waaaaay short on detail (even the alleged madam isn't claiming she slept with Pace, and "helping" someone buy an apartment doesn't necessarily mean forking over suitcases full of cash), but one imagines that the scandal is rocking the Time Warner Center.

Time Warner has yet to respond, but it will have to soon.  Unless Pace can persuasively deny any and all of the alleged madam's intimations (a denial that will presumably have to include an explanation of the alleged "help"), he will soon be "pursuing other interests."

Until details emerge, it would be unfair to give the married Pace a Doh! Award for his own actions, if any.  But it is fair, I think, to give him one for being the subject of a Post story entitled "Doing Time."  For Wayne's sake, here's hoping there's a good explanation.

Comments

[KING TROLL]

Bitches I am BACK. FIRST

[billy]

TROLL

Your DNF last week an embarrassment to you and your family.

Im hoping you broke your other hand or a few legs.

[Reader]

Is this People Magazine or an intelligent business blog? Who cares?

[Me]

testing

[Victor]

Microsoft employees search with Google:
http://www.informationweek.com/news/showArticle.jhtml?articleID=189501002

I can't imagine any less of a positive sign than your employees wilfully abandoning their own technology to use their competitors technology.

[Stephan Richter]

AOL FANZ,

That's right, a BLOCKBUSTER LAYOFF for the ages!!! Finally the show is almost over and the curtains are about to be drawn.... sources suggest that AOL is going to have a "75% layoff" of the Access business which is home to the AOL Broadband and AOL Narrowband departments.

This hatchet is expected to drop sometime between August and early October-06 timeframe however a "reorganization" is expected to be announced on or around the early Aug earnings call. The new AOL strategy will amount to shutting down AOL broadband because the economics do not work for the bundle -- $6-7 in cost and $3-4 in bundled revenue per subscriber.

AOL losses cash on each subscriber that they migrate over to Telco broadband. Host costs are to blame...but wait...there are over 25,000 servers.....Cable companies hosts costs are a few dimes a month per user not $5.00/sub/mo. And you might have though there were economies of scale....you thought wrong....

The entire Narrowband marketing engine is expected to also be shut down -- no direct marketing, perhaps only the online channel will survive which is perhaps 10% of all sales. Over the last 12 months over 600 million CD-Roms were sent out with a ~0.5% response rate at $200 mm in cost.

AOL has about 2 remaining choices which are currently being considered....

1) Make AOL Free so that there may be some potential long term AOL.com strategy before all 18 million remaining subs leave....hmmmm this smells like 1999 when NetZero came on the scene....AOL for free with advertising to the max to kill Netzero. Geez, I still can't believe some marketing genius put ZERO in their name. LOL.

2) Reduce the unlimited narrowband cost from $25.90 (see below) to under $10 and compete head to head with NetZero, Juno, etc....the bottom of the barrell. Well we know for sure that AOL will kill Netscape (low cost flanker) in either scenario....and Compuserve....that died a long time ago....what has not died that has been touched by AOL?

3) Let me see, what else could they do...split up the dial-up, broadband group, digital services, and AOL.com....DUH. Thats like splitting a terd into 4 pieces...its still a terd and smeels no matter how you dress it up.

GMAT question.....

$1.0 Billion (13-24 months ago) --------> $250 MM (Last 12 months)----------------> $$ XX (next 12 months) ....

Did you get that right? Slap yourself on the back if you came up with $62.5 MM and high five your neighbor. That is what one could expect AOL to spend in the following 12 months on marketing spend in this death spiral. This is the "lights out" scenario that was considered 2 years ago but somehow some excellent BSer convinced someone at TWX to hold onto AOL.

If you were caught in the AOL hallways in 1997-2000 you would expect to give slap happy high fives as the stock went up...but little by little director by director, VP by VP, pure incompetence was being built...each dummer than the next..... TWX milked them dry - no new ideas or products....or if they were they were late, very late.

Remember the slogan..."AOL, so easy to use, it’s no wonder we’re number one"...well its no wonder they have not gone extinct yet without a product. They had a thick cushion but the air has leaked out. The lights are on and last call has sounded...and DAMN DOES SHE LOOK UGLY.....back to what is pertinent....

The only thing which will likely survive for some period of time will be the US AOL.com and the digital services unit as well as the international development of the India and Chinese portals....wait...aren't they like 20 years late on this? Ok, Ok...10 years but you get the point. Wasn't a ex-Sony exec fired in AOL Int'l for suggesting a portal strategy that went against the scared cow for the China JV deal in 2000? Hmmm,....

Didn't Pitmann say "focus on Dial-up" in Summer 2002 just when the subscriber base peaked....hmmm....vision....

One thing to note is that the US portal is likely not really profitable on a standalone basis because 80% of the page views are generated by AOL subs which is falling fast if you have not noticed....even the portal as a stand alone does not look to have legs.

Also you probably did not catch it but AOL quietly raised the price of AOL dial from $23.90 to $25.90. What? Why not sock it to your customers with the slimmest choice.... the old folks who can't see their bills on their credit card statments without bifocals.... and those that cannot even get a broadband connection...

And if that is not enough how about this video:

http://www.nbc11.com/news/9406542/detail.html

This is the big one you have been waiting for.

Expect AOL CC3, 4, 5, and 6 to be closed down and sold off. Perhaps only CC1 and 2 will remain. This should not be a suprise to anyone...the suprise should be....why didn't they do this about 2 years sooner.

AOL RIP