AOL White Whale, Patch, and the CEO

It's a sad tale, all wrapped up in ego --

AOL Chief’s White Whale Finally Slips His Grasp - " . . . Armstrong had a sentimental, and some would say debilitating, attachment to Patch. He helped create it in 2007 while a senior executive at Google. When he got the top job at AOL in 2009, he persuaded the company to buy it. Patch then proceeded to churn through leadership, business models and write-downs on the way to its reduced state. The board of AOL, handpicked by Mr. Armstrong, authorized him to invest $50 million on the idea in 2010 and after that, it became a black hole for cash. By the end, it had cost an estimated $300 million. (AOL said the figure was more like $200 million.) Mr. Armstrong’s big dream had become a nightmare that wore out his shareholders and set off a proxy fight in 2012. The hedge fund Starboard Value L.P. ran for three seats on AOL’s board, saying it did not believe Patch was a “viable business.” The insurgents lost the war, but turned out to be right. Mr. Armstrong was able to keep the peace with other AOL investors in part by engineering a $1.1 billion sale of AOL patents to Microsoft and returning much of that value to the shareholders, but the additional time — or was it rope? — that he secured did not change the outcome at Patch. . . ." (read more at link above)

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