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Great Example of the Pressure of Quarter to Quarter Earnings

A great critical analysis of the challenges that MapQuest faces is on Silicon Alley Insider, written by the former CTO of AOL, namely someone who theoretically had the power to make change and apparently did not?  I hate to see crying out of school like this, although I think he does a nice job of breaking it down.  Let me be clear: I don’t know him, have never met him, and look forward to being his friend as he is way more of a power broker than me.  I hope that accusing his post of crying out of school does not taint our relationship.

This is also a great example of something people love to see in blogs: The comments are more constructive than the initial post.  Very engaging material is an SEO and traffic gold mine.

Follow on comments discuss how opportunities to invest in MapQuest were passed over because contributions back to the company were needed to make quarterly numbers.  This long-term vs short-term tension is found in every public company as their revenue numbers become increasingly difficult to hit.  When McKinley discusses how straightforward the Google UI is vs the ad-ridden Mapquest UI, the next question is obviously one of “How are you supposed to build a sustainable business”, because Google’s is clearly heavily subsidized today.

Of course, now you are seeing these same problems at all kinds of businesses as the economy goes south.  Google is starving the losers.  If Google Maps had not taken the share it had taken in the last year, it could easily find itself on the Google scrap heap as they arbitrage their business to make increasingly challenging quarterly numbers.

Speaking frankly, some of these same challenges exist for me, working at an AOL subsidiary, but the problems are far more nuanced than the comments on this blog imply.  I think everyone feels like we are still in the second or third inning of the ball game.  There are literally hundreds of tremendous growth opportunities facing the company and we are forced to make decisions about which to pursue.  Even if AOL required no contribution, while we could choose more, we could not choose them all.  It is easy to point the finger a few years later and say, “We should have done that one.”, but every decision made involves dozens of negative options.

Furthermore, AOL has macro resource decisions that need to be made.  They are making decisions across the organizations: Should investments be put into existing profitable properties or invested in new initiatives that have not yet gotten traction.

Other comments discuss the choices made in API delivery: Google offers a free API with no support, Mapquest requires payment and extensive support.  Mapquest targets the corporate behemoths, Google targets the long tail.  Probably a valuable lesson.

Finally, a great comment by a former AOLer discusses the SEO impact of Mapquest decisions.  Mapquest did a poor job of SEOing their site.  When they dropped from #1 to #2 in map search results, traffic dropped tremendously.  Now they are #4 and Google is #1.  Frankly, that could explain virtually the entire tradeoff in traffic.  A 20% traffic decline for Mapquest as they drop from #1 to #4?  Sounds right.

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