Hill Holliday Wins Bid to Hype AOL Transition
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By JESSE NOYES  Buried treasure isn't the only thing AOL is looking for around Boston.
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(InfoWorld) - AOL on Monday confirmed to its employees the rumored departure of several senior executives and announced a reshuffling of top-tier management duties in a memo penned by Randy Falco,Â the new chief executive officer. Five high-level executives are leaving, all of whom reported directly to Jonathan Miller, the former CEO whoÂ was abruptly fired in mid-NovemberÂ to the surprise of many. Four of them figured prominently in Miller's strategy,Â outlined in September, to complete AOL's radical transformation from a provider of dial-up Internet access that charged for most of its content and services to an open and free Web portal focused on online advertising revenue. Miller had been praised for early success in transitioning the company to an ad-driven model, and some AOL observers are concerned that the shakeup could destroy the momentum he built up. In particular, some view with skepticism that Miller has been replaced by a TV industry veteran and not an Internet specialist. Falco was president and chief operating officer of the NBC Universal Television Group. In Monday's memo, obtained by IDG News Service, Falco praised Miller's plan but said it needed to be "tighter, clearer and better focused on operations" with a greater focus on execution and with more accountability "built into the organization." "In such crucial areas as our speed to market and innovating new products, we have much work ahead of us," Falco wrote. Heading out the door are Jim Bankoff, executive vice president of consumer and publisher services, and Joe Redling, president of AOL Mobile, customer management and paid services, and CEO of AOL International. Joining them will be John McKinley,Â whom AOL had already acknowledged was leaving. Randy Boe, executive vice president for consumer advocacy and privacy, has also resigned, as well as John Buckley, executive vice president of corporate communications. Falco's memo doesn't say when these men will leave. All decided to resign on their own accord, sources said. "AOL has just gone through elements of a significant reorganization, and I know that the departure of well-respected colleagues and friends is not easy for anyone here," Falco wrote. Eight executives will report directly to Falco, including Ted Leonsis, AOL vice chairman; Ron Grant, president and chief operating officer; and Steve Swad, chief financial officer. Grant, a former senior VP of operations at parent company Time Warner Inc. who arrived after Miller's departure, will oversee AOL's business units: products, programming, platforms, AOL media networks, paid services, and international. The new CTO, Balan Nair, will also report to him, "because smoothly integrating our technology resources into the business units has been such a priority," Falco wrote. Kevin Conroy, who reported directly to Miller, will be in charge of products, including AOL Mail, the AOL PC software, portals, video and video search, storage, safety and security products, AIM and mobile products. Bill Wilson will head AOL's programming, an area Bankoff ran, while Falco is still looking for someone to oversee AOL's platforms, including the search engines, e-commerce offerings and online mapping site MapQuest. Mike Kelly, who also reported directly to Miller, will continue to head AOL Media Networks, which includes the key ad sales operation. Kim Partoll, who reported to the departing Redling, will continue in her role managing AOL's paid services. Another area Redling managed, international, still lacks a chief.
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AOL will attempt to compete directly with the likes of Yahoo Inc., MSN and Google Inc. when it launches its own free Web-based e-mail service.
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America Online Inc. (AOL) has decided not to fully support Microsoft Corp.&#39;s Sender ID spam-fighting plan after the Internet Engineering Task Force (IETF) and the open- source
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Time Warner seems ready to sell its underperforming AOL unit -- but with the possibility of a Microsoft-Yahoo merger, the list of potential acquirers has grown much shorter.
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For the most part, AOL's future plans are the same old story.
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Averting a looming court battle over how it has been handling the exodus from its Internet dial-up service, AOL has agreed to make it easier for its remaining customers to leave as part of a $3 million settlement with 48 states and the District of Columbia.
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(InfoWorld) - Time Warner wants AOL to complete successfully its transition to an ad-supported business and isn't mulling "structural" changes to it, such as selling it or spinning it off, Time Warner Chairman and CEO Richard Parsons said Tuesday. "We're doing better than I had hoped [with AOL], but we still have a long way to go. We have to make sure we stay tightly focused there," Parsons said at a Goldman Sachs conference, responding to questions from a financial analyst. Time Warner's priority for AOL is to make sure the Internet subsidiary executes properly its transformation from a business based on subscriber fees for dial-up Internet access and takes full advantage of the opportunity in the vibrant online ad market, he said. Two key issues are to increase AOL's own ad inventory that it sells directly to clients as well as fortifying the ad platform that allows it to act as a broker and distributor between advertisers and third-party Web sites. "Those are the big executional challenges, given where we're coming from with AOL and the speed at which the industry is moving and the competition," said Parsons, whose appearance was webcast. "That's where the focus is, not on doing something structural with AOL." Parsons said that the dynamics of the online ad market are shifting toward this latter business of ad brokerage and distribution, whose margins are smaller compared with the direct-sales inventory. The reason for this change is that advertisers increasingly see value in the broader reach that ad networks provide as opposed to buying ad space in a specific site like a portal, he said. "It's kind of exciting in one sense, [and] it's a little daunting in another sense because it's all moving so fast, but we think we're in the middle of it, and we think we've got the right tools, management, and technologies to play aggressively," he said. After recently acquiring Advertising.comÂ and several other companies that specialize in behavioral targeting, video ads and mobile ads, AOL has a leading position in this segment of the market, he said. "I think we have the lead in that space right now, so it's ours to lose," he said. In fact, AOL can and should be a growth driver for Time Warner as long as it can increase its revenue at or above the growth clip forecast for the online ad market, Parsons said. That didn't happen in the second quarter, when AOL's online ad revenue grew 16 percent, leading some financial analysts to question AOL's ability to capitalize on the online ad opportunity. Currently, the U.S. online ad market has been growing its spending between 25 percent and 35 percent, according to reports from the Interactive Advertising Bureau. Still, Parsons is optimistic about his Internet subsidiary, which this week announced thatÂ it plans to move its headquarters to New York City and that it has integrated its various ad networks into a single platform. This platform, called Platform A, meshes Advertising.com, behavioral targeting specialistÂ Tacoda, mobile ad unitÂ Third Screen Media, video ad specialistÂ Lightningcast, and ad serving unit AdTech. "Everything we're doing in AOL is around trying to create a platform that has broad reach, increase the amount of our own inventory, and then have [the tools] to optimize [the ads]," Parsons said.
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IAC/InterActiveCorp is probably not interested in combining with AOL. But such a deal may be a good way to deal with the competition posed by Microsoftâs proposed acquisition of Yahoo.
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AOL on Monday confirmed to its employees the rumored departure of several senior executives and announced a reshuffling of top-tier management duties in a memo penned by Randy Falco,Â the new chief executive officer.
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AOL yesterday said it is buying its fourth online advertising company of the year, part of an ongoing effort to transform itself into an Internet advertising concern.
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In a blow to Google Inc., which provides general Web search for America Online members, AOL yesterday said it has chosen Fast Search &amp; Transfer to power a revamping of its local search service.
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Time Warner Inc.&#039;s AOL LLC online unit is considering giving away more of its services, including e-mail, to customers who already have a high-speed Internet connection, a person familiar with the discussions said Thursday.
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(InfoWorld) - AOL has integrated its various ad networks into a single platform that it hopes will jumpstart its online advertising business, whose weak growth in the second quarter has led to sharp criticism of this Time Warner subsidiary. On Monday, AOL announced that the integrated ad platform, called Platform A, meshes Advertising.com, Tacoda, Third Screen Media, Lightningcast, and AdTech. AOL also announced it will move its headquarters from Dulles, Virginia, to New York City, in order to be physically at the center of the U.S. advertising industry. However, the announcement comes at a time when questions about AOL's strategy and performance are at a high point. In August, when Time Warner issued its second-quarter financial report, some observers were surprised that AOL's online ad revenue grew only 16 percent during the quarter, well below the industry average. In the first quarter, online ad spending in the U.S. was up 26 percent year on year, according to the Interactive Advertising Bureau. Last year, spending grew 35 percent over 2005. AOL in recent years has been transitioning its business model from one based on subscription fees to one based on online advertising. Toward that end, it has made almost all of its content and services freely available on the Web and discarded its "walled garden" approach. Until the second quarter, AOL's online ad growth had either been in line with the industry average or exceeded it, justifying the strategy change. But the quarter's results led some financial analysts to openly question if AOL can successfully pull off its transformation into an online ad-supported business. Time Warner has been investing in AOL's online ad platform. In 2004, AOL acquired Advertising.com, a provider of online marketing services to publishers and advertisers, and last yearÂ it bought Lightningcast, a broadband video advertising specialist. This year,Â AOL snapped up Third Screen MediaÂ to boost its mobile advertising services, and also acquired AdTech for its ad-serving and marketing campaign-management platform. Most recently,Â it bought Tacoda, which specializes in delivering ads based on users' online activities, an area known as "behavioral targeting." With Platform A's unveiling on Monday and the move to Manhattan, AOL executives are convinced that the subsidiary will get its online ad business back on track. AOL is no stranger to corporate shakeups and reorganizations. Almost a year ago today, it announced a significant realignment of its internal business structure, only to see its then-CEO and Chairman Jonathan Miller get his walking papers two months later. Miller's replacement, Randy Falco, unveiled major changes to Miller's plan in mid-December amidst a shakeup that saw several high-ranking executives head out the door. Separately on Monday, AOL also announced an agreement with HP to offer co-branded, localized versions of AOL's portal, toolbar and search engine on HP desktop and notebook PCs sold worldwide. The agreement extends and expands an existing relationship between the companies of a co-branded AOL-HP portal as the default home page in HP consumer PCs sold in the U.S.
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Firm follows AOL as second high-tech company to depart recently from Washington region.
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Build it (and make it free) and will they come? AOL likes to think so.
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AOL is rumored to be close to a deal with Third Screen Media, a mobile advertising startup, The Wall Street Journal reports. The company had previously been in talks with Microsoft over a possible deal.