Setting A Low Bar, AOL's Tiny Valuation Is Great Work By Tim

It's not often that you get to applaud a CEO for getting his company a tiny valuation, but that's what we'd like to do for AOL CEO Tim Armstrong.

An industry source described AOL's low valuation (~$3.2 billion) as a "great piece of internal salesmanship" by Tim.

Why?

Because a low valuation:

• Sets a very low strike price for AOL employees' new options, which will help the company retain talent.

• Assures AOL stock is more likely to grow out of the gate

• Generally sets lower expectations for a turnaround.

• It makes it easier for Tim to sell the company at a premium a year or so from now.

Way to go, Tim!