IP Democracy: AOL's Miller: As Clear as Mud

I just finished listening to AOL’s Chairman and CEO Jonathan Miller give a talk to Deutsche Bank’s Media and Telecommunications conference and for the life of me can’t really figure out what he said. Miller, who was pressed by the DB analyst on how AOL intends to compensate for its plummeting dial-up base, spoke in buzz phrases, stream of consciousness, sentence fragments and generalities to the point that he wasn’t imparting any real information.

Asked how AOL plans to maintain profitability as its more lucrative dial-up base gets supplanted by lower margin broadband subscribers, Miller said “we designed the business over the past several years to variabilize the cost structure,” without offering any further details about just how costs will drop, what those “variables” are or how efficiencies can be wrung out of the costs.

He then added “we have to get to where we have to get to,” and “we have to get there so that we bring people along for the ride” and “believe it or not, we’re actually getting to a place where we’re in the zone.” Huh? Where does AOL have to “get to,” what people are you bringing along for which ride, and what, exactly, is “the zone?”

My favorite quote from the talk (and here I have no idea what this is in reference to):

“When you have one of them you have something and when you have something you have to drive it globally and at scale.”

Is all this vague-talk a sign of real trouble at the online unit? Miller was clearly being pressed to answer for the slipping growth at AOL, and with no good data to back him up, no clear strategy for keeping profits up, Miller had no choice but to speak in confusing generalities.

He did say, somewhat more clearly, that AOL is banking on online advertising growth, noting that AOL, with its new web-based portal, can charge the same advertising CPM rates as Yahoo, something the company couldn’t do two years ago. Moreover, video advertising is a big hit. “Video advertising is really taking off. We’re in essence sold out on video advertising,” he said.

Posted by Cynthia Brumfield on June 14, 2006 11:19 AM to IP Democracy