Breaking: AOL has named a new CEO and chairman. Tim Armstrong, who headed up ad sales in the Americas for Google, will replace Randy Falco as chairman and CEO. AOL President and COO Ron Grant will also be leaving the company. Armstrong’s name has been bandied about as a potential CEO or top executive at several companies. He takes on a challenging post at AOL, which does not have the strength of either Google or even Yahoo in terms of advertising assets or traffic.
This was a very closely held hiring, say our sources – even top execs at AOL weren’t told about Falco’s leaving until just before the press release went out earlier this afternoon.
Falco came from NBC when his predecessor Jonathan Miller was kicked out. Falco reorganized AOL, focusing on combining its portal (which still generates a huge amount of traffic) with its advertising assets—now bundled together under Platform-A. His strategy was to make AOL an ad network, with AOL’s own properties serving as a foundation and source of guaranteed inventory.
But the advertising strategy never quite took hold. Partly, that was because the economy blew up. Last quarter, advertising revenues at AOL were down 18 percent, total revenues were down 23 percent, and the company took a $2.2 billion writedown for previous acquisitions. Yahoo, however, saw only a 2 percent decline in display advertising during the same quarter, and a one percent decline in overall revenues. Google’ revenues, meanwhile, grew 18 percent. powered by search advertising. Armstrong was responsible for a big chunk of that revenue, and his expertise in the still-growing part of online advertising—search—no doubt made him a big catch for Time Warner CEO Jeff Bewkes.
AOL definitely has a sales issue, as is clear by its relative performance to Yahoo and Google. And Armstrong is seen as someone who can help solve that, along with another recent hire, Greg Coleman from Yahoo. Coleman is the new head of sales at AOL. But what would entice Armstrong to leave Google, especially if he was the beneficiary of some of the recently repriced options?
Time Warner wants to get rd of AOL. It was looking to sell it outright, but now it is gearing up more for an eventual spin-off. If Armstrong can get AOL in shape for an IPO or make it attractive enough for a buyout offer from Microsoft or some other acquirer, he will get his payday.
Below is the press release:
TIM ARMSTRONG NAMED CHAIRMAN AND CEO OF AOL
Former Google Executive to Build AOL’s Future
and Help Determine Optimal Structure for AOL
NEW YORK, March 12, 2009 – Tim Armstrong, Google Senior Vice President, has been named Chairman and CEO of AOL, LLC, Time Warner Inc. (NYSE:TWX) Chairman and CEO Jeff Bewkes announced today. Current AOL Chairman and CEO Randy Falco and President and COO Ron Grant plan to leave the company after a transition period.
In making the announcement Mr. Bewkes said: “Tim is the right executive to move AOL into the next phase of its evolution. At Google, Armstrong helped build one of the most successful media teams in the history of the Internet — helping to make Google the most popular online search advertising platform in the world for direct and brand marketers. He’s an advertising pioneer with a stellar reputation and proven track record. We are privileged to have him preside over AOL as its audience and programming businesses continue to grow and its advertising platform expands globally. He’ll also be helpful in helping Time Warner determine the optimal structure for AOL”
Tim Armstrong said: “I’m very excited about the opportunities presented in leading AOL. AOL has a wide-ranging set of assets and audience. The company is well positioned to enhance those assets into a larger share of the Internet audience and advertiser communities. AOL and Google have been partners for years and I look forward to collaborating with Jeff Bewkes and his team as we explore the right structure and future for AOL.”
Mr. Bewkes added: “Randy led AOL in its transition from a subscription business to an audience business. Under Randy and Ron, AOL’s programming sites exhibited year-over-year growth in unique visitors for 23 consecutive months with many of its sites now in the top five of their categories., They also assembled Platform-A, the number one display ad network in the U.S. with a reach of more than 90%. They also aggressively cut costs as they restructured the Audience business portion of the company into three distinct operating units: People Networks, MediaGlow, and Platform-A. As Randy and Ron move on, they leave AOL with our gratitude and appreciation for remaking the company and bringing it to a new and promising level.”
Tim Armstrong was a member of Google’s Operating Committee and served as the president of the Americas Operations. Under the Americas Operations, Armstrong’s team managed publishers and advertisers’ relationships and platforms with some of the world’s most widely recognized media and agency brands. Armstrong started at Google in the year 2000 and opened the first office outside of the Mountain View, CA headquarters.
Mr. Armstrong joined Google from Snowball.com, where he was vice president of sales and strategic partnerships. Prior to his role at Snowball.com, he served as director of integrated sales & marketing at Starwave’s and Disney’s ABC/ESPN Internet Ventures, working across the companies’ Internet, TV, radio, and print properties. He started his career by co-founding and running a newspaper based in Boston, MA, before joining IDG to launch their first consumer Internet magazine, I-Way.
Mr. Armstrong sits on the boards of the Interactive Advertising Bureau (IAB), the Advertising Council, and the Advertising Research Foundation, and is a trustee at Connecticut College and Lawrence Academy. He is a member of Mayor Bloomberg’s MediaNYC 2020 committee. He is a graduate of Connecticut College, with a double major in economics and sociology.
Wow, this is more of a death sentence than investing in a competitor to the NFL.
It’s easy… AOL needed someone who knows how to copy-paste the Adsense code on their homepage…
Holy fucking shit.
BTW, he’s just there to make sure GOOG should buy AOL. He’ll make more cash when he sells it to the mothership.
after the beebow fiasco anything is worth a shot. guy sounds like a positive shot in the arm. hopefully he knows the future of the net revolves around social network. he will need to understand the power and potential that professional social networks will present in the future. i see aol putting too sleep the beebow domain and changing it to something that makes sense and has a better ring to it.
ChangeLocator.com – make a difference
Please do us just one big favor and shut up.
assLocator.com – make an ass shut up
Good to know but I’m pretty sure this is part of a bigger deal brewing between AOL and Google. I won’t be surprised if the latter snaps up the company later.
Seems everyone has written AOL off too quickly.
The AOL portals have been kicking major ass for over a year now. So have other sections of AOL media (AOL finance, etc.)
Armstrong stepping seems like another very smart step.
It’s true AOL as a company isn’t exactly healthy, but unlike others (Yahoo), there are some parts of the company shining very very brightly. It’s my opinion that AOL is poised for a turnaround.
I think that there are still tons of people out there using AOL because they have been for years; and a lot of them are 50+.
This won’t end well for Tim or AOL. AOL is an unstrategic portfolio of random assets with high aggregate traffic. Like IAC without strategy or transactional revenue.
Totally different than Tim’s accomplishments on top of an exploding business at GOOG. You can’t googlify AOL. You can’t just bring in a super salesman. Hate to say it, but you need a dispassionate banker to chop it up and reconfigure/sell before the salvageable parts go to zero. A big-picture ad-based turnaround born of an internet visionary ain’t in the cards.
Here’s the scenario I’d bet on:
Quarters 1&2: Carol Bartz-style revitalization horseshit ‘n’ swagger. Moxie usually only works for chicks, but this guy’s pretty – he might pull it off.
Q3&4: Reorgs and new acquisitions/spinoffs
Year 2: “We’ve stabilized…now let us grow”
Year 3: Time’s up; Tim’s out. Shut it or sell it.
There is no alternate reality that has a better upside.
@PVDUDE by far the best response I have seen, nothing much can be done to save AOL.
That seems like a nice little job…
unlike the role that Carol B. need to do in Yahoo!
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http://listenin...to.blogspot.com
They should focus on better product, not on better ads… This will make their product ad-driven, as opposed to user need/technology driven… They got it wrong again.
lets see how AOL works out ….. good luck to AOL and Tim.
This is a GREAT move…seriously …two of the best ad sellers on the planet
- it will be better than watching grant hill on DANCING WITH THE STARS this season…
Tim Tim Tim, what have you gotten yourself into?
google is already a successful company.. hope that Tim can likewise contribute in making AOL successful.. Great move for AOL.. It was nice to hear that Tim’s transfer was okay for Google execs.. Good Luck!!
AOL = Armstrong Online
TA is a great guy. Basically invented search advertising.
He’ll turn around AOL.
yay for sexypants
Ask him to pay back the $800 million he paid for Bebo – but to pay back out of his own pocket.
what a sorry bunch of execs they have there at AOL. They just keep making it worth a little less with every day that goes by.
If it was up to me, anyone who carries VP title and up should let go today. Promote the young people there, and with ex-Goog in the lead they may have a chance.
we all know the social presence of Google. a big zero. excuse me Orcut. same thing. forgive me. i dont mean to be rude but what the hell is G lettling fadbook run away with the social scene. G is always slow to the door. maybe they like it that way. what kind of strategic social agenda can this new guy bring to the table. im not sure social is his forte. AOLD is already pushin google ads. how is he gonna help AOLD advertise better when his 8 year ad innovation product is already on there site?
TheoryLocator.com – just thinking
Let’s see – a sales guy when technology leaders win. Gates/Microsoft; team Google; Bartz/Yahoo; Zuckerboy/Facebook. And AOL chooses nice guy Tim.
The goal must be packaging AOL to sell. No way to win with a publisher or a sales leader in charge. The web technology is too complex for non-techs to lead.
They should have picked Mike.
Well It’s really great move. Now I think AOL has to focus more on quality web 2.0 products which will tim to promote AOL better than earlier.
We All have to agree that even a great sales men cannot sell useless products.
But a even a average sales men can sell a great product.
We have to agree Google had a great product line up and Tim helped the cause in the wind.
I hope Tim and his team sets up better product vision and goals for AOL.
AOL lacked good vision and missed the social networking revolution in the big time.
Its evident that you have to make your products legacy asap and invent new things. Else you will be a legacy or history.
AOL clearly lacks the urge and motivation for innovation and young vibrant brains.
Lets make the best when we can.
Madan KN
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more treating of symptoms instead of going to the root cause. aol needs so much more than a madison avenue connection. it need heart and soul… it needs a brand… and it needs an innovative and productive culture.
AOL still has the ability to innovate with products. What it doesn’t have is the permission or the funds from Time Warner to do so on any significant scale. If Tim is unable to fix this as fast as possible then I’ll think he’s just there to warm the seat and collect his massive bonus after AOL is parted out or killed.
There’s no problem having a sales guy in charge of a company – as long as he gives authority to people outside of sales to deliver something to sell (e.g., innovative products). It remains to be seen if this young CEO has the management skill to do so, or if he’s just another egotistical, selfish, self-absorbed exec.
Looks like AOL has a plan. Interesting how they are regrouping adding new talent.
I’m sure Tim is a smart guy and given credit for Google’s success but on the other hand, anybody in his position would have been successful. However, I do respect the man for getting out of the comfort zone and jumping into the frying pan. If he can turn AOL around, he will be the hottest executive around.
As an AOL employee, it’s great to read all these positive comments. Thanks for believing in us guys – we’re trying.
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Tim is not going to googlize AOL. He’s going to collaboratively figure out AOL’s core competencies, build on them, and add his considerable marketing and image knowhow into the mix to achieve a reborn entity that responds to the opportunities of the new era.
AOL JUST SORT THINGS OUT NOOOOOOWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW………………LOL
SHAPE THE F–K UP AOL FOR GOD SAKE……LOL