AOL boss Tim Armstrong likened himself to Warren Buffett, saying the two are the only people in the US investing in local news. (AP)
AOL, emerging victorious from an investor revolt, is still trying to Patch things up.
CEO Tim Armstrong, who yesterday beat back an attempt by shareholder Starboard Value to gain AOL board control, is taking the win as a mandate to double down on his long-criticized online local news properties — Patch.
“There are only two people in the US investing in local news and information: me and Warren Buffett,” Armstrong told The Post yesterday, comparing his strategy to that of the Oracle,of Omaha, who recently bought local media properties.
Patch, a network of news sites in communities across the US, has spooked many investors with its cost. AOL is pouring up to $150 million a year into the sites, which will register up to $50 million in revenue this year, Armstrong said.
However, the CEO predicted profitability by the end of 2013. “We’re going to grow consumer engagement as well as commercial opportunities around Patch,” he said. ”As user traffic grows, we’ll continue to look more and more at monetization.”
AOL is looking for ways to connect Patch more with local businesses and consumers, and Armstrong said readers will see a number of changes on Patch sites, but was short on specifics.
Investors appeared less than enthused.
AOL shares fell 5.6 percent yesterday, to $25.57, partly because investors anticipate Starboard to cut and run, selling off its 5.3 percent stake.
Starboard lost its board battle despite the support of Institutional Shareholder Services.
In April, AOL sold $1 billion in patents to Microsoft, a deal that deflated much investor resentment with a sharp turnaround for the stock, which is up more than 65 percent on the year.
Armstrong said AOL will give 100 percent of the patent money back to shareholders after the deal is closed, which could come “very quickly.”