AOL’s ad revenues fell 20%.  That was the past.  Personally, I love their Media Glow strategy: creating smaller sites (but still huge) that focus on one demographic, on stand-alone URLs.

For smaller media companies like Gawker, eventually it didn’t make sense to have stand alone web properties (think Valleywag being folded into Gawker.com under valleywag.gawker.com).  But for AOL - one of the largest portals around - having everything under AOL.com also doesn’t make sense.

They can still get traffic by bundling the smaller sites under AOL for reporting.  But whereas previously the value of advertising real estate tumbled with each level, this way they retain more value.

For example, AOL.com being the main front page would be very valuable.  Say they wanted to have a men’s channel under Men.AOL.com, this would be seen as one level lower, and Men.AOL.com/Health (for example) would - while more targeted - be seen as two levels deeper.  The deeper you go into a site’s maze, the less advertisers value it.

But by having a site like Asylum.com to reach men, then Asylum becomes both the “frontpage” and a targeted, uniquely branded property, and Asylum.com/Health is both targeted and only one level down.

This might all seem rather technical, but I think that despite today’s 20% meltdown, over time, this strategy will look very smart.  Read more on Business Insider.

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