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AOL released its first-quarter earnings today, posting a 5 percent rise in advertising revenue and a 14 percent drop in subscribers to its Internet access business compared to the first quarter of last year. Domestic display ad sales declined by 1 percent, which Peter Kafka says will be "fresh meat for AOL critics" like investment firm Starboard Value, which believes content is "a high cost strategy," that requires "substantial in-house editorial and sales personnel." It also says it thinks AOL's Patch has a "structurally flawed business model."

AOL's first-quarter report says "Patch grew traffic and advertisers over 40% year-over-year and revenue over 100% year-over-year."

During a conference call Wednesday morning, AOL CEO Tim Armstrong said that "there's a lot of noise about Patch" but it remains "a very long value proposition for us." Patch has already booked revenue for 2012 that exceeds revenue booked in 2011 and will be profitable by the end of 2013, in part by lowering expenses, he said. Expenses have been lowered as town and regional staffs have "smartly organized the editorial process." Armstrong also said Patch is planning a new product. Despite that growth, Kafka notes that "Traffic is down 4 percent to AOL's own properties over the last year." Armstrong said that in the first quarter total unique visitors grew, in particular at Huffington Post, Moviefone, Patch and AOL Autos. Huffington Post, he said, had one billion page views from Jan. 1 through March 31. Accompanying information, though, shows unique visitors at AOL properties are down since the second quarter of 2011, when it reported 113 million uniques; this quarter the company reports 108 million. (more...)

Arianna Huffington appeared on "The Colbert Report" Wednesday night to talk about her website's first Pulitzer Prize win. Huffington Post started in 2005, the same year as Stephen Colbert's show. "And you and I are just racing toward the accolades," he said, then asked: "What specifically did Huffington Post win for? Was it for Heidi Klum nip slips? What was the article?" Here's the exchange that followed:

Huffington: You know what Stephen, I have a feeling that you're just bitter and jealous.
Colbert: Am I? Am I? How's your Peabody, baby? How's your Peabody? Maybe my Peabody could fight your Pulitzer. ... As a website you win a Pulitzer Prize, right? You can also win a Peabody with a website.
Huffington: Who needs a Peabody when you have a Pulitzer? ... You need to stop aggregating the Huffington Post. Do you know how much of our material you use?
Colbert: All of it. ... A year ago I started the Colbuffington Re-post. You aggregate from all over the Internet, and I re-aggregate from all over your website. And I hope you're here to give me my re-Pulitzer.

After the jokes, Huffington talked about David Wood's Pulitzer Prize-winning work. Wood told Mallary Tenore on Monday about his win, "It’s an affirmation of what Arianna said: ‘You can do great journalism from any platform.’ ” Here's full video of Huffington with Colbert: (more...)

Business Insider | TechCrunch | The New York Times
TechCrunch has confirmed Business Insider’s report that Arianna Huffington’s role at AOL has been reduced. TechCrunch -- owned and operated by AOL -- published a story late Thursday night saying that Jay Kirsch now runs TechCrunch, Engadget, Moviefone, Stylist, AOL Video, AOL.com and TUAW. Kirsch became responsible for the Tech sites’ business operations in December 2011, when Heather Harde left her position at AOL as GM of TechCrunch, Engadget, Joystiq, and TUAW. The business responsibilities Kirsch gained then were Harde’s, not Huffington’s. Kirsch was part of the February announcement that TechCrunch had a new editor.

But Alexia Tsotsis now reports that Kirsch “will be looking for an Editorial Manager to fill a role under him and deal directly with each individual site, according to sources.” If true, that means Huffington no longer has editorial control over all the AOL brands and Web properties she began managing when AOL purchased her  website over a year ago. Tsotsis’ reporting follows Nicholas Carlson’s story that Huffington was demoted, which was a response to Brian Stelter's story in The New York Times.

Carlson said by phone Thursday night that his curiosity was aroused when he read Stelter’s story, “Huffington Gains More Control in AOL Revamping" so he checked with "very good sources" who told him that “all these media brands were hers, and now they’re not."

I’m awaiting an official response from The Huffington Post and AOL about what, if any, changes have occurred regarding oversight of these sites and Huffington’s role with them. I’ll update when I hear back.