David Brancaccio: Activist shareholders are planning to bring their fight with AOL to the online portal’s annual meeting in Boston this morning.
They don’t like AOL’s turnaround strategy and they’re trying to shake up the board, as Marketplace’s Queena Kim reports.
You’ve got mail!
Queena Kim: AOL probably cringes at this relic. But its dial-up business is what keeps the company profitable. And those profits are paying for AOL’s money-losing turn-around strategy, which includes something called Patch, a network of neighborhood news sites meant to bring in local advertising. It lost about $150 million last year.
Clay Moran: Starboard argues that it will not reach meaningful profitability ever, ever.
Clay Moran is an analyst with Benchmak. He says Starboard wants AOL to sell Patch or shut it down.
Ben Schachter, an analyst with Macquarie, says not so fast.
Ben Schachter: They need to figure out how to do this profitably but I don’t think they need to have their hand forced.
He adds that AOL’s recent billion-dollar patent sale to Microsoft gave AOL’s stock a boost. And Moran says that’s not good news for Starboard.
Moran: Shareholders will probably give AOL’s management a pass this time.
But, long-term, it may only be a Patch.
In San Francisco, I’m Queena Kim for Marketplace.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?