{ "docId": "019dd923-622b-71dc-a6d9-afa084f9cd73", "docSlug": "eb305b39ce19", "documentTitle": "AOL, Inc. (AOL)", "authorId": "03_Starboard_Value", "authorName": "Jeffrey C. Smith", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2012-05-23 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 36, "pageCount": 96, "prevPage": 35, "nextPage": 37, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 6, "notes": "The slide uses a combination of deductive reasoning (the $40M revenue calculation) and authority citation (the former executive quote) to expose a contradiction in AOL's business model for Patch.", "elementsJson": [ "headline_text", "paragraph", "bullet_list", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6d9-afa084f9cd73/36", "deckHref": "/decks/019dd923-622b-71dc-a6d9-afa084f9cd73", "deckJsonHref": "/decks/019dd923-622b-71dc-a6d9-afa084f9cd73.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d9-afa084f9cd73#slide-36", "components": [ { "bbox": null, "kind": "callout", "text": "This inventory could be placed on any AOL property, yet we believe it is pushed to Patch in order to justify continued investment in Patch.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-5376-7749-9ecd-a160e0b081e9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.85, "x": 0.08, "y": 0.45 }, "kind": "list", "text": "The reality however, based on Patch’s actual results to date, implies that either a significantly higher percentage of volume is being sold through ad networks or that local advertisers are buying ad slots at steep discounts to Patch’s rate card pricing.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1f4dd02c-ce98-4716-8417-9940d42bf0d1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.85, "x": 0.08, "y": 0.32 }, "kind": "list", "text": "Even if we hypothetically assume that Patch can generate $40 million of revenue in 2012, and that local businesses constitute approximately 25% of Patch’s ad slot placements at a 10% discount to rate card pricing, this would imply that the remainder of Patch’s ad sales are being sold at discounts of 96% to rate card pricing.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3cea2f6b-7bd4-416b-91da-b4ed54abec90", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.85, "x": 0.08, "y": 0.19 }, "kind": "paragraph", "text": "We believe the majority of Patch’s ad slots are being filled with remnant AOL ad inventory at very low CPMs. This inventory could be placed on any AOL property, yet we believe it is pushed to Patch in order to justify continued investment in Patch.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ba1e441f-c700-48df-bf93-96ec0bcfee3d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.555 }, "kind": "quote", "text": "… I would estimate that 90-95% of national ads on Patch are being filled by ad networks at a CPM of $1 to $2….", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "05de128b-c977-4c44-9e0f-5ef7b487bd8f", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "… I would estimate that 90-95% of national ads on Patch are being filled by ad networks at a CPM of $1 to $2…. — Former Patch sales executive, March 2012", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-5376-7749-9ecd-a698f15665fc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.14, "y": 0.64 }, "kind": "source-note", "text": "– Former Patch sales executive, March 2012", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "55e12aea-8196-4ccf-b6fd-a09cc92a7f11", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.85, "x": 0.08, "y": 0.87 }, "kind": "source-note", "text": "(1) Assumes 25% of Patch’s ad slots are being filled by local advertisers at a 10% discount to rate card pricing... (2) Based on interviews conducted by L.E.K. Consulting.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8fe21773-3ac4-4a55-9bcf-285a584e394c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.85, "x": 0.08, "y": 0.12 }, "kind": "title", "text": "It appears AOL fills Patch ad slots with remnant AOL ad inventory", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "59d22545-fd65-48cd-8f4a-e37d25ff60d6", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "01d032a0-7aba-4cba-9a3c-3a8e4e3531c1", "evidence": "Uses a quote from a former Patch sales executive to validate the thesis.", "confidence": 0.95 }, { "name": "deductive-reasoning", "slug": null, "matchId": "94d9dd5e-a5a5-402d-8cf2-50fd6ac78752", "evidence": "Uses a hypothetical $40M revenue scenario to derive a 96% discount rate.", "confidence": 0.9 } ], "arcBeats": [], "loops": [ { "to": 82, "from": 7, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "5f7759ea-34c0-4890-95eb-4e615002289f", "evidence": "The document highlights the costs of inaction and the need for change in AOL's operations and strategy", "position": 0, "objective": "Highlight the costs of inaction and the need for change", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.8, "description": "Quantify what happens if the audience does nothing" }, { "to": 40, "from": 13, "name": "The Reveal", "slug": "05-the-reveal", "bestFor": "Product launches, strategic pivots, unexpected findings", "matchId": "72c3326c-e9da-478f-9331-9b5ff9d74c6d", "evidence": "The document reveals the truth about AOL's Display business and Patch, highlighting inefficiencies and losses", "position": 1, "objective": "Reveal the truth about AOL's Display business and Patch", "structure": "Setup the Question -> Build Suspense -> The Big Reveal", "confidence": 0.7, "description": "Build mystery and anticipation, then deliver a surprising or powerful conclusion" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }