In a bid to slash costs, AOL plans to shut down a number of non-performing products and blogs.

Among the products on the chopping board are Xdrive, AOL Pictures, Bluestring and MyMobile, all falling under the supervision of executive vice president of products and marketing, Kevin Conroy.

While some products will be shut down, others will be ignored and allowed a slow and quiet death. There are also doubts about the future of another under-performing product, My AOL.

Meanwhile, AOL also plans to cut or dump its blogging properties, with AOL bloggers ordered to stop or reduce their blogging until August, after which their future remains uncertain.

Presumably, AOL is slashing expenses in an effort to prepare for the worsening economy, or to shape up to be sold, or both.

Sources: Michael Arrington, “AOL To Shutter A Slew Of Products, EVP Kevin Conroy’s Future Uncertain”, Tech Crunch, July 24, 2008, Michael Arrington, “AOL Makes Big Budget Cuts Across Blogs (Updated)”, Tech Crunch, July 24, 2008

You’ve probably heard the argument — that you’re better off increasing your conversion rate than increasing the level of traffic to your website.

It makes a lot of sense — all things being equal, you’ll achieve more sales and profits by increasing your conversion rate by, say, 1% than by increasing your traffic by 1%.

But you’ll notice that I said “all things being equal” and, in many if not most, cases all things are NOT equal.

You also need to consider the cost (time, money, resources and missed opportunities) involved in increasing your traffic versus increasing your conversion rate.

Now we often assume that it’s more costly to generate more traffic than to increase the conversion rate (through better copy, web layout, the offer being made and a slew of other factors).

But it’s always dangerous to “assume” anything. There is a cost involved in tweaking, and tweaking, and tweaking your website, just as there’s a cost involved in paying for pay-per-click advertising, writing articles, distributing press releases, paying for search engine optimization consulting, and so on.

And there may come a point at which the cost/benefit of further website modifications is actually worse than the cost/benefit involved in generating more traffic.

Bottom line — assume nothing, track and test everything, and think in terms of cost vs benefit.