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AOL CEO Armstrong Moving Full Steam Ahead with Patch

On the heels of winning a proxy showdown against a gang of grumbling shareholders yesterday, AOL CEO Tim Armstrong is punctuating his victory over that cabal of activist investors known as Starboard b...
AOL CEO Armstrong Moving Full Steam Ahead with Patch
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  • On the heels of winning a proxy showdown against a gang of grumbling shareholders yesterday, AOL CEO Tim Armstrong is punctuating his victory over that cabal of activist investors known as Starboard by pushing the very product they insisted was a poor business endeavor: AOL’s local news platform, Patch.

    Although Patch has yet to return a profit for AOL, the platform started showing signs of life last month by setting a new record in both traffic and revenue. Now, Armstrong appears to be taking the rebuke of Starboard’s attempted insurrection of the company’s board of directors as a license to continue developing the online local news service. “There are only two people in the U.S. investing in local news and information: me and Warren Buffett,” Armstrong told The New York Post.

    While Patch is expected to have its best year yet in 2012 by generating $40 to $50 million in revenue, Armstrong expects that the platform will finally be producing a profit by the end of 2013. He said two key components to turning Patch into a source of profit involve increasing consumer engagement as well as developing new ways to monetize the expected growth in traffic.

    Meanwhile, Starboard took a break from licking its wounds after yesterday’s vote and sold off more than 425,000 shares of AOL in the aftermath, sending the company’s stock falling 5.7%. Way to lose with dignity, guys.

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