AOL shares tumble over plans to reinvest in websites

AOL has tumbled the most in nine months after CEO Tim Armstrong outlined plans to reinvest in websites, such as The Huffington Post, in a bid to reach a more global audience and be more competitive.

“Brands like The Huffington Post will become global platforms,” Mr Armstrong said yesterday, after the company reported fourth-quarter profit that topped analysts’ estimates.

The company’s big brands will “get bigger quickly”, he said. This year “is going to be investment mode”.

The Huffington Post blog will go live in Australia later this year, after debuting in Greece and India during the fourth quarter, said Mr Armstrong.

AOL has focused on automated advertising, or using high-powered machines to buy and sell ad space on websites, and online video ads to make digital adverts more efficient and relevant to individual consumers.

Last month, the New York-based company fired about 150 employees, mostly from the sales division, as such advertising requires fewer salespeople. The layoffs will affect AOL’s revenue in the first half, the company said yesterday. AOL had about 5,000 employees worldwide at the end of 2013. It is also folding two sites into the tech website Engadget as it simplifies its portfolio.

Bloomberg