Devoted to online marketing, viral marketing, and web marketing

With the social networks starting to take market share away from web portals, AOL (TWX) has had their share of setbacks as they announced their ad growth for the second quarter will be less than expected. It's not good news as the last quarter they also dropped in growth from 40 percent for four straight quarters, down to 16 percent.

Time Warner is starting to realize that the AOL portal is not large enough for advertisers, and is taking a series of steps to change that reality.

"We don't think portals are big enough to meet the demands of advertisers," AOL Chief Operating Officer Ron Grant said in a phone interview. "We will be adopting the network model on a global basis."

One move they're making is to expand their existing deal with Hewlett-Packard (HPQ), which is only in the U.S. at this time. Now the deal will consist of co-branding their local-language versions of the portal, toolbar and search services on HP computers in two dozen countries. It's part of their strategy to reach into 30 new countries within two years.

Another part of their strategy is to increase ad dollars through their own third part ad networks, said Time Warner CEO Richard Parsons.

To that end the company has brought the various units together under an AOL ad sales force: Platform A. Under the umbrella will be advertising.com, Third Screen Media, Tacoda, ADTECH and Lightningcast. Together they reach 90 percent of all U.S. online users said AOL, citing Media Metrix data.

"The strategy behind creating the new entity is to drive revenue and results (for advertisers)," said spokeswoman Anne Bentley. "We're hopeful we'll start to see favorable results almost immediately."
 
Of course the last thing is they've moved their corporate headquarters to New York City to be closer to the advertising capital.

The strategy is pretty simple really. They're looking at the $290 billion U.S. advertising market for short-term growth, and their long-term strategy is to expand to the international advertising markets, especially through their partnership with Hewlett-Packard.