AOL Media Business Nearly Worthless Despite Spending 2 Billion on Acquisitions

I’ve got into many arguments with people over the years about the viability of hyperlocal citizen media.  My view is that the numbers just don’t make sense if you’re planning on paying for the content with ads. The counter argument has usually invoked the optimism over at AOL.  The company has poured hundreds of millions into Patch and has spent billions on media properties like Huffpo to help build up its content business.  But anyone who’s looked at the numbers knows this is a crazy plan.  Now one of AOL’s investors is asking to meet with CEO Tim Armstrong to explain himself.  In it they highlight that:

AOL has a $1.36 billion market cap – which again, means shareholders value the media business at ~$6 million – despite having spent over $2.3 billion on acquisitions since 1999 and $667 million since 2009!.

via Heres The Damning Letter A Massive AOL Shareholder Just Sent Tim Armstrong.

Like I’ve been saying for years – that’s crazy.