AOL considers mass firings to amass profits
Time Warner's troubled Internet unit, having resorted to me-too strategies in search, copying Google, and in portals, copying Yahoo, is now copying itself, going back to its old ways of mass layoffs. At Silicon Alley Insider, Henry Blodget crunches the numbers on various layoff scenarios. And here's the thing: It's not like AOL is losing money. Far from it. It's simply not as obscenely profitable, as, say, Google, which is adding employees as fast as AOL seems to be shedding them. A layoff of a quarter of its staff would lift AOL's profit margins from 39 percent to 52 percent, Blodget estimates. Given the constant dwindling of its Internet-access business, and the uncertain growth of its online advertising sales, cutbacks, while regrettable, seem logical. Let's just not pretend Time Warner's doing this to keep AOL alive; they're doing this to keep AOL gushing cash.