Recent press report on AOL's newest round of layoffs which is likely to "reach into the hundreds by the end of the week." Many of the cuts are projected to take place at the Netscape unit in California, but some will be targetted at the Dulles, VA headquarters. The company's revenues and stock price have rebounded slightly, in the recent past, from a historical low early in the fall.

I have long maintained that AOL is not really a software company, but a media play. Should a media company be building its own software? Sure, AOL's software seems to be what they peg their value on, but its not really true. The cold reality is that selling ads and aggregating content has become the core value proposition for the firm, not connecting to the Internet.

AOL could potentially outsource all software development, and deliver a better product. Of course, they bought Netscape so Netscape could be their software company, but they are effectively pruning that company down to nothing, and Netscape hasn't built anything except for the once-upon-a-time Netscape browser. Its time to cut the cord, and not by half steps, which is what Time Warner CEO Parson seems to be doing.

Relative to the company's instant messaging services and software, the company has already gone through a reorganization and downsizing of folks earlier this fall, and is adopting a partnering strategy for marketing and support of its enterprise instant messaging product. Probably a sound strategy when confronted with competitors like Microsoft, IBM, and Oracle.