AOL will phase out several online services as the Time Warner unit continues to struggle in its transition from a business model based on subscription fees to one based on advertising revenue. AOL will put out to pasture Xdrive, a hosted-storage service for individuals; AOL Pictures, a photo sharing and management site; and Bluestring, designed for sharing photos, music and videos, according to an internal memo obtained by technology news site TechCrunch. In the memo, AOL Executive Vice President Kevin Conroy said these and mobile services AIM World and MyMobile will be “sunset” because they haven’t gained enough popularity. A source close to AOL said the leaked memo is legit and that it was intended solely for Conroy’s team.
AOL’s popularity problem among end users and advertisers seems widespread, judging by the anemic growth AOL achieved in advertising revenues in the first quarter: 1 percent, when compared with the same quarter last year. AOL has been on a years-long shift away from its traditional business, based on charging people for dial-up Internet access service and for exclusive online content. It has been trying to move to a model based on online advertising, which has been experiencing strong growth in the past five years. AOL will try to sell Xdrive, AOL Pictures and Bluestring so that existing users of those services will be able to transition to a new provider, but if no buyer is found, the products will be shut down by the end of the year, according to the source.
Source: NY Times
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