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Silicon Alley Insider: Digital Business, Live From New York

Time Warner (TWX): How AOL Blew Q2

One of new COO Ron Grant's early initiatives was to make AOL executives justify everything they were doing that was different from what Google and Yahoo were doing.  The layout on AOL's search pages, for example, was different than Google's, and Grant did not find the search team's justification for this layout compelling. 
Search revenue immediately tanked, putting the company on track to miss its internal target. 
Meanwhile, in an attempt to goose search revenue, AOL began promoting search results on the service's main pages.  This accelerated clicks (and revenue), but also had other consequences.  Most notably, it resulted in a torrent of unqualified leads--users who hadn't really been interested in searching for products--suddenly clicking on sponsored search links.  As a result, traffic to advertisers' sites did not deliver the expected ROIs.
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