AOL's Going(.com) Going Gone!
AOL's Going.com has announced it will be closing on May 1, 2011. Below is the email that AOL (NYSE:AOL) sent to Going.com community members earlier today. Kara Swisher reported on AOL's acquisition of Going back in 2009 at a value of $10 million.
Context & Ripple Effects
Going.com's shutdown lands squarely inside the cleanup Tim Armstrong and Arianna Huffington started last month: on March 22, AOL began culling its content sites as part of the Huffington Post integration, after sources reported several hundred layoffs in early March and the termination of freelance journalists. A $10 million acquisition from 2009, per Kara Swisher's reporting, is now surplus to the new editorial structure.
It is also a familiar rhythm for AOL. In 2007 the company shut down Netscape.com's social-news experiment amid big layoffs, and in 2008 it steered Journals bloggers over to Google's service rather than keep running the property itself. Going.com follows the same template: properties bought or built outside the core content engine get retired once strategy shifts.
First-order effects
- Going.com members lose their local-events community on May 1, 2011, with AOL notifying users by email this week — the site's traffic and event listings disappear from AOL's portfolio barely two years after the reported $10 million purchase.
- The shutdown removes one of the standalone community sites from the Huffington Post Media Group's remit, concentrating AOL's consumer-facing effort on the merged editorial operation.
Second-order effects
- Competing local-events and group-buying services inherit Going.com's orphaned users at essentially zero acquisition cost, since AOL is not migrating them to an in-house replacement.
- Every other niche property AOL bought before the Huffington Post deal now sits under the same review logic — owners of those communities face the question of whether they are next in the cull.
Third-order effects
- AOL is establishing a pattern across two decades of portfolio churn — Netscape in 2007, Journals in 2008, Going.com in 2011 — where acquisitions outlive their strategic rationale and are closed rather than integrated, which raises the effective risk premium on selling small community startups to large portals.
- If the Huffington Post consolidation holds as the operating model, AOL structurally becomes a smaller number of scaled media brands rather than a long tail of community sites — a shape that determines what kinds of properties it will still bother to acquire.
The trend: Post-acquisition portal portfolios are being pruned toward a few scaled editorial brands, with small standalone community purchases like Going.com retired once the parent's strategy consolidates.