AOL Moves to Build Tech 'Newsroom of the Future'

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To keep costs in check, some of AOL's news and blog sites, including Politics Daily and Engadget, are entirely run by virtual workforces. Editors and writers interact and produce news remotely, using tools such as chat.

profit-sharing with journalists?

AOL plans to continue hiring editorial staffers. In February, the company signed Marty Steinberg, a 28-year veteran of the Associated Press, to be executive news editor of AOL News. Armstrong also plans to replace Bill Wilson, the departing head of its media business, with fellow Google alumnus David Eun in March.

News editors' computers come equipped with software—created internally by combining data from AOL's own analytic tools with such other resources as social network feeds and Google's trend-tracking service—that provides daily updates on the number of Web clicks AOL's stories receive. "Audience growth and audience engagement have to be the things that we judge the most off of our journalist investments," Armstrong says. AOL is even considering sharing a portion of quarterly profits with staffers whose work fetches the most page views.

In January, AOL ranked seventh in overall traffic on the Web, with 87.6 million unique visitors, according to Nielsen—a drop of nearly 2% from a year earlier, when it ranked fifth. Its news sites make up about one fourth of that traffic, or 22.5 million page views.

To help get traffic flowing back to its site, AOL is letting user interest play a role in story assignments. Editors use internally developed software to figure out what topics are hot on the Web, based on activity on such sites as Google and Facebook. Frequently, stories are assigned to explore such popular topics as "How to Open Champagne," which was published in December on AOL food site Slashfood.

"fear" readers will generate fluff

Seed, a service AOL launched last year, similarly pays freelance journalists to write on subjects in demand. For example, Seed recently asked for short, 100-word blurbs on "Your best packing tips." Entries are edited for quality and accuracy and then posted on AOL sites. Vetting outside contributors and thoroughly editing the submissions is crucial to keeping AOL's brand intact, Armstrong says. "I don't think we would call it user-generated content," he says. The company's January acquisition of StudioNow, for $36.5 million, will let videographers post content on AOL sites for pay.

Some journalists fret that by letting the readers decide which stories get assigned, media outlets risk turning their attention away from hard, investigative news. "My fear is that once they start analyzing where their traffic comes from and where their dollars come from, they decide maybe journalism should go after Hollywood celebrity stuff and sports figures who are doing dope," says Alan Mutter, who writes about the media industry on the blog, Reflections of a Newsosaur.

That hasn't been the effect for James Graff, who joined AOL after losing his job as a senior editor at Time. "We're breaking stories," Graff says. "We're feeling the kind of hum that comes from the fact that we're building something."

Douglas MacMillan is a staff writer for Bloomberg BusinessWeek in New York.

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