Brad Garlinghouse, a former SVP at Yahoo, joined AOL as President of Internet and Mobile Communications two months ago. And he’s clearly doing a little housekeeping, and forming his own exec team. His first major hire? Kiersten Hollars, a Digg PR exec.

Hollars is part of Garlinghouse’s old team at Yahoo, and left the company shortly after Garlinghouse did to take over PR and communications at Digg. She joins AOL later this month.

“This is more about working with Brad again, and nothing about Digg,” she told us in a phone interview this morning, adding that she’s excited about the turnaround opportunity at AOL. She joins AOL as senior director of corporate communications, reporting to both Garlinghouse and EVP Corporate Communications Tricia Primrose.

Digg’s looking for Hollars’ replacement immediately. So if you want be the person to handle all corporate communications and Kevin Rose babysitting duties at Digg, let them know.

AOL is losing another longtime executive, David Liu. He is the senior vice president in charge of Global Messaging, which includes AIM, ICQ, and AOL’s more recent Lifestreaming products. Liu spearheaded the transformation of AIM into a lifestreaming client that mixes private and public messages from Twitter, Facebook, and elsewhere.

When CEO Tim Armstrong was looking for someone to head up AOL’s overall Internet and mobile communications, which also includes email, Liu was the strongest internal candidate. But Armstrong decided to go outside the company and hired Brad Garlinghouse, who used to be in charge of all of Yahoo’s communications products.

A couple days ago at the Web 2.0 Summit, AOL CEO Tim Armstrong caused a little bit of a stir when he hinted that AOL is working on a “secret” technology project. When pressed for details on what exactly it is, he was vague. But after fishing around with our sources, we have a pretty good idea.

The secret project is a new content-management system (CMS) which will make it easier to produce and publish Web content across AOL’s sites and perhaps beyond. It will also help AOL scale up the number of contributors who write articles and produce videos for its numerous media sites well beyond the thousands who are working for it today.

At the Web 2.0 Summit today in San Francisco AOL’s chairman and CEO Tim Armstrong took the stage for a discussion with Federated Media’s John Battelle. Armstrong, who was previously in charge of the Google ad group in America took the AOL job in March as the company prepares the split from its parent, Time Warner.

The Armstrong talk can be summarized pretty easily: Content, content, content. Armstrong made it very clear that not only is AOL in the process of spinning off into its own public company, but that they are now going to be a content company. In fact, they’ve gone from 500 journalists to over 3,000 since he took over. And that will keep growing.

An interesting tidbit has emerged from America Online’s lawsuit against Advertise.com over the latter’s alleged trademark infringement and unfair competition with regards to AOL-owned Advertising.com. (One is Advertise.com, the other is Advertising.com. Yeah, I was confused too).

Well, a preliminary ruling came out last week when the U.S. District Court for the Eastern District of Virginia granted the startup’s motion to transfer the case over to California, where Advertise.com is headquartered and where AOL boasts multiple offices.

We got our hands on the court documents (embedded below), which conveniently reveal some previously undisclosed numbers about Advertise.com’s current and projected revenues.

It’s the way of many acquisitions – a startup gets bought, and a couple of years later, after the earnout expires, the founders get an itch to start something new.

AOL acquired Goowy, a creator of Flash widgets, in early 2008. Now, we’ve confirmed, the core team – Alex Bard, Gary Benitt and Jeremy Suriel, have left AOL to start their next company, Assistly. Brad Birnbaum, formerly the CTO of eShare and Talisma, joins them as well.

So what is Assistly? We don’t know much yet. The website says little more than “Coming soon… Customer service done right. Brought to you by Alex Bard, Brad Birnbaum, Jeremy Suriel and Gary Benitt.” But I did manage to get a little bit of information out of Bard. He says of Assistly:

Foursquare is the location-based iPhone app getting a lot of love in the press (and from VCs) these days. And while there is no shortage of location social networking apps in the App Store, Foursquare works well on the platform because it’s based on the active checking-in to venues, which is perfect since the iPhone doesn’t allow apps to run in the background (though Loopt has a workaround). While Brightkite has also long been in this space, it’s been a while since any new viable competitors have come along. But we recently got two more: Gowalla and Going.

AOL has been seriously testing lifestreaming in various betas for AIM and AIM Connect for a few months now. At TechCrunch50, AOL just announced that lifestreaming will come out of beta on September 22 and will be part of the AIM product portfolio across Windows, Macs, the Web, iPhones and Windows Mobile.

Last week, the paid version of AIM for the iPhone was updated with lifestreaming capabilities. Today, lifestreaming is coming out of beta across AIM 7 for Windows, AIM for Mac, AIM for the Web, and AIM for Windows Mobile.

A few months ago AOL found a way to fuse AIM, its popular instant messenger client, with the broader messaging systems like Facebook and Twitter that have begun increasingly important on the web. AIM now includes a new tab dedicated to the lifestream — a combination of your friends’ activities on Facebook, Twitter, Flickr, AIM itself, and a variety of other services (think of it as a FriendFeed with integrated chat). Tonight they’re bringing the lifestream to the iPhone with AIM 4.0, which is now live on the App Store for $2.99 (the free version doesn’t currently offer this functionality).

AOL, under new management and with a spinoff IPO on the horizon, continues to fill out its executive ranks.

The newest hire: former Yahoo exec Brad Garlinghouse will join AOL as President of Internet and Mobile Communications. Garlinghouse will report directly to CEO Tim Armstrong.

Garlinghouse will take control of AOL’s mail and instant messaging products. He’ll also head AOL’s Silicon Valley operations in Mountain View and serve as west coast lead for AOL Ventures. Bebo, acquired by AOL in early 2008, is now part of AOL Ventures.

In July, AOL Instant Messenger (AIM) embraced the stream in a new beta (for both Windows and Mac) and started moving beyond simple IMs. You can now see your Facebook and Twitter feeds, along with AIM buddy updates and feeds from other services.

The problem was that the Twitter and Facebook feeds were only one way. You could read them, but you couldn’t send updates from AIM to the other services. A few weeks ago that changed, and AIM status updates can now appear as updates in Facebook and Twitter as well.

AOL, rather than fixating on building business and staying relevant post Time-Warner, is suing search and display platform provider Advertise.com for trademark infringement and unfair competition. Furthermore, the company is also partly responsible for the near-done sale of the domain name Ad.com for a reported $1.4 million falling through, leading to the seller of the domain name subsequently suing the buying party, says DomainNameWire.

The global rise of Facebook is nothing less than astounding. In the month of June alone it gained 24 million unique visitors worldwide, compared to the month before, for a total of 340 million unique visitors worldwide. It is now the fourth largest site in the world, trailing only Google, Microsoft, and Yahoo sites, according to comScore (see table below). Facebook itself only officially acknowledges 250 million active registered users (but you don’t have to be a registered user to visit some Facebook pages).

In the past year, it has grown 157 percent, gaining 208 million visitors. It long ago passed its rival MySpace on a global basis, way back in April, 2008. Since then, it has passing even bigger sites on its way up. In the chart above, the blue line is Facebook. It passed Amazon back in August, 2008. eBay fell by the wayside in January, 2009. It surged past AOL sometime in February, 2009, and just last month it finally passed the Wikimedia Foundation sites (which includes Wikipedia).

The recession in online advertising, which began in the first quarter of 2009, continued into the second. Every quarter we keep track of the combined advertising revenues of the four largest Web advertising companies (Google, Yahoo, Microsoft, and AOL), which together represent the lion’s share of all online advertising revenues and is a decent proxy for the market as a whole. In the second quarter of 2009, their combined global ad revenues were $7.864 billion, down 3.4 percent from a year ago.

In economics, a general rule of thumb is that two down quarters marks a recession. Last quarter saw the first annual decline in advertising revenues of 2.1 percent. And the annual decline this quarter got a little worse. However, on a sequential basis compared to last quarter, it is actually pretty much flat (but still down 0.18 percent). So we now have two down quarters on both an annual and sequential basis.

Will this recession continue into the current quarter, or did we just witness a fundamental “reset”, as Steve Ballmer likes to call it.

Like everyone else I’ve watched the print media world fall apart over the last few years. The poster child for that industry is the New York Times, of course, and their many missteps in recent memory have been well chronicled. In early 2008 Marc Andreessen started a New York Times Deathwatch, and the company’s financial performance has degraded since then.

I keep wondering what would happen if the top 10% of the writers at the NYTimes just…walked out. I know it’s crazy, but let’s just explore this a bit for the heck of it.

Today the company is worth just a little over $1 billion. As recently as five years ago it was worth nearly 5x that much. You have to go back to the early 1980s to see a lower stock price.

I certainly don’t think the NYTimes is going to be shutting down any time soon. The company still pulls in nearly $3 billion a year in revenue, down just 10% or so from 2005. But massive overhead, and more than 9,300 employees, make profitability an increasingly difficult goal for The Gray Lady. Her age is showing.

In June we wrote about AOL’s evolving “Toyota” strategy to evolve into an online media powerhouse just as the print media world is falling apart. New CEO Tim Armstrong hasn’t been pinned down on how hard he’s betting on this strategy in recent public appearances. But the strategy is clearly kicking into high gear anyway, even as the company prepares for a public spinoff from parent company Time Warner.

AOL now has 1,500 people writing content across its scores of content sub-brands, we’ve confirmed. Around 1,000 of those people are working full time for AOL, the rest are freelancing. That’s more than double the number that they had creating content a year ago, and by this time next year, we’ve heard, the plan is to have 2-3x as many people as they do now.

Where is AOL hiring these journalists? From the failing print world. We’ve obtained a list of hundreds of these individuals, including former journalists at BusinessWeek, New York Times, USA Today, ESPN, Washington Post, Wall Street Journal, Forbes, Consumer Reports, Condé Nast and scores of regional and national newspapers and magazines. A few of them are listed at the end of this report.

From our earlier post describing the media strategy:

Time Warner released it second quarter results today, and the numbers aren’t good. Overall, revenue was down 9% versus the year-ago period as poor results from the publishing, film and yes, AOL dragged down the numbers for all. CEO Jeff Bewkes remarks are telling:

At the same time, we’re continuing the reshaping of Time Warner that we started last year. We’re on track to spin off AOL to our stockholders around the end of the year. Separating AOL will benefit both companies – enabling Time Warner to concentrate fully on our core content businesses and improving AOL’s operational and strategic flexibility.

That’s three AOL mentions in three sentences. Clearly, Time Warner is happy to let everyone know that it will only have a couple more quarters of dealing with that division’s nosedive.

Google finally sold back its 5 percent stake in AOL to Time Warner. Originally valued at $1 billion in 2005, Google ended up getting back only $283 million, including some cash distributions. There goes roughly $700 million, but Google already took a writedown on the investment back in the fourth quarter when the whole world was going to pot and nobody really noticed.

Time Warner took back the shares in preparation for the eventual public spinoff of AOL. When Google initially bought the shares, it valued AOL at $20 billion. Based on the price Time Warner paid for the repurchase of the shares, AOL is now worth $5.7 billion.

Yes, Tim Armstrong does have a secret plan to save AOL, and it involves cartoons starring Warren Buffett and Martha Stewart. At an employee meeting today to rally the troops with his new strategy, Warren Buffett and Martha Stewart were on hand to talk about their new Web cartoons. AOL founder Steve Case is also there Tweeting about it (he took this picture of Buffett and Stewart on stage).

Buffett’s cartoon will be called “The Secret Millionaire’s Club” and it will be geared towards teaching kids about business (fun!). “Martha Stewart KIds” will feature a 10-year-old Martha Stewart. Both will be produced by A Squared Entertainment, along with cartoons starring supermodel Giselle Bundchen (”Gigi & The Green Team”) and the late astronomer Carl Sagan (”Kosmos”). Each show will have 26 episodes, which will run three to five minutes each.

Interesting off hand comment by AOL CEO Tim Armstrong at the Fortune event this morning. Bebo, the social network AOL paid $850 million for in 2008, wasn’t mentioned on the list of AOL’s core product goals going forward. Late in the interview, though, Armstrong was asked where Bebo fits into that strategy. His answer, roughly quoted “Bebo may be better off under AOL Ventures, with it’s own P&L.”

Translation – AOL is looking to spin Bebo off into an independent company, and they’ll retain an equity interest via AOL Ventures.