Platform A Continues to Flounder

(MoneyWatch)  AOL's Platform A was supposed to help energize the ailing Internet company, but seems to be enervating it instead. The ad group, formed a year ago after a round of acquisitions by AOL, was forced to lay off one hundred employees earlier this year. Now it appears that the group is intentionally cancelling some contracts with advertisers. A story at Beta News says:

Advertisers are now starting to pull back from AOL's Platform-A ad platform, acknowledged Time Warner CFO John Martin, speaking this week at Merrill Lynch's investors conference.

Although AOL's ad revenues had been growing "like a weed," spending by advertisers has recently slowed down, according to Martin. "[This] gives us pause in terms of our confidence to ramp advertising in the back half of this year," he told the investors.

The CFO also warned that, after projecting in August that its ad revenues would rise through the end of 2008, AOL might now miss its revenue targets.

Some of this, of course, can be laid at the feet of a slowing economy and nervous advertisers simply tamping down on spending as everyone waits to see exactly what will happen.

But there's also the fact that AOL has failed to bring together the disparate companies it acquired to form Platform-A, as can be seen by the consistent rumors of corporate infighting. Platform-A has also made some maladroit moves as of late. For instance, the company shuttered Tacoda in August, a targeted ad network that AOL acquired with a relatively good reputation within the industry, and asked Tacoda customers to sign up with bottom-feeder ad network Ad.com instead.

All of this must make Time Warner's hopes of eventually dumping the once-dominant AOL onto someone else seem a bit dimmer.