Day 1 At AOL : We Want To Believe

The line on Wednesday night snaked outside the New York Stock Exchange building as a swarm of marketing, advertising, and other media types waited to get into the party that AOL was throwing on the trading floor to mark its spin-off from Time Warner.

An evening commuter walked past, craning his neck up at the massive AOL-logo banner--yes, the one with the fuzzy blue monster on it--and asking a few of the people in line, "Why's AOL having a party?"

"Spinning off from Time Warner."

"Oh, finally," the commuter replied, and sauntered off into the night.

Approximately 10 minutes later, security stalled a pack of party guests between the coat check and the entrance to the trading floor so that they wouldn't get in the way of AOL CEO Tim Armstrong's photo op on the red carpet with publishing industry dame Anna Wintour. There were waitresses carrying massive bourbon-infused cocktails called "The Ticker," sushi chefs chopping up spicy salmon rolls, and a photographer snapping pictures of guests posing with the iconic NYSE gavel. Oh, and there was a DJ booth where rap legend Sean "Diddy" Combs was calling the shots.

The next morning, long after that had all been cleared out, trading of the new AOL stock commenced: it fell in the first hour, hovered around $23 for most of the day, and climbing a few notches to close at $23.52. It looked less like the refreshed, shiny AOL that had turned the NYSE trading floor into a celebration of its vision of 21st-century publishing, and more like the AOL that, in preparation for the spin-off, cut 2,500 employees and began to explore selling off peripheral businesses like ICQ and MapQuest.

"I haven't looked at it because we've been so busy," Armstrong, in a morning call with reporters and analysts, said of the company's stock price. "The stock may go up and down, but I can tell you internally that the company continues to progress and get stronger."

Not very long ago, AOL was a punchline: edgy publishing outlet Thrillist, known for its in-the-know men's newsletter and wacky stunts that often involve party planes, threw a party in the summer of 2008 with a "vintage AOL" theme that interspersed the once-ubiquitous dial-up tone with mid-'90s pop songs (Thrillist CEO Ben Lerer, it should be said, happens to be the son of former AOL exec Ken Lerer). AOL was the ultimate brand for the old Internet, the one that would forever be associated with the "You've Got Mail" recording and the e-mail addresses that have long since fallen out of favor.

Its attempted revamp does elicit a few "over the hill" snickers, but in New York's media community--the people flooding the Stock Exchange on Wednesday night--it's treated with a good deal of respect. Armstrong was very well-regarded in his prior gig as a sales executive at Google. At the lavish AOL spin-off party, there were fewer snarky remarks than expected about wasted money, premature celebration, the disastrous results of AOL's original Time Warner merger in 2000, or how many laid-off employees the event had cost.

Because these are the people who, as much as New York media likes to thrive on an aura of cynicism, really do want the new AOL to succeed. The industry's been more or less smashed to bits, with magazines closing up shop and newspapers going through yet another fit of layoff rounds. Regardless of early concerns about its stock price, the new AOL is a bright spot.

Using its 2005 purchase of blog network Weblogs Inc. as a cornerstone and ambitiously rolling out new properties to add to the arsenal, AOL increasingly shifted focus away from its access business and more toward publishing. The company uprooted its corporate headquarters from Dulles, Va., to New York, picking a downtown office space in much closer proximity to the trendy digital agencies and blog networks of SoHo and Cooper Square than to the media industry stalwarts--including then-parent company Time Warner--in midtown.

Shortly before the spin-off, AOL announced a project that Armstrong had been hinting at for some time: Seed.com, a sort of clearinghouse for assigning freelance journalists and photographers to areas that its "engine" has deemed to be high-interest or in need of coverage. The company hired veteran journalist Saul Hansell to helm the project.

"Basically, our system allows us to take lots of data to figure out how to make better content for the Internet," Armstrong said in Thursday's conference call.

Seed.com has garnered some criticism: that it's really no different from existing business models of companies like Demand Media; that it will invariably prioritize tabloid-like, sensationalist stories with huge readership potential rather than less titillating but important journalistic endeavors; or that regardless of how innovative it is, it won't save AOL's advertising revenues.

Armstrong, of course, has a "go forth" attitude toward it all. "We focused the strategy of the company very clearly and succinctly around content, advertising, and communication," he said in Thursday's call. "And as we think about the future and stay focused on what we're going to be executing, we're in a good place because of where the Internet is headed. The '90s were about access, (and) AOL played a major role in access...This decade has really been about platforms: Google, Facebook, Twitter, etc., and we believe that the next decade will really be about content.

Not everybody agrees. But the invite list for AOL's celebration sure hopes Armstrong has the right idea.

By Caroline McCarthy