AOL revamps internal business structure

AOL is undergoing another significant business reorganization.

Less than two years after its last major reorganization, AOL is again redrawing its internal business architecture to better align it with its new strategy to focus on online advertising and retreat from the Internet access market.

In an e-mail message to employees Wednesday, AOL Chairman and Chief Executive Officer Jonathan Miller said AOL's four business units -- Access, Audience, Digital Services and Europe -- will be replaced by "smaller, nimbler product groups with more authority and greater accountability."

AOL must become a global business led fully by its products, he wrote. "We made progress breaking down the matrix, but we did not, in my opinion, go far enough. Now we will go further," reads the e-mail, a copy of which was obtained by IDG News Service.

While product leaders will become general managers with wide-ranging authority over product development, the ad sales operation will remain centralized, as will the legal, human resources, finance and public relations operations. Having companywide oversight and services is important, he wrote.

"The recent Search data debacle is a prime example of why, even with the best of intentions, without proper oversight, costly mistakes can be made," Miller wrote, referring to the scandal that erupted last month from AOL's release of search engine records.

Although the reorganization is in flux, Miller has defined several roles. Randy Boe has been entrusted with a unit dedicated to AOL's protection of consumers, and he will soon appoint AOL's first chief privacy officer. Boe's replacement as general counsel will be announced next week. There is no mention in the e-mail about what role, if any, Tatiana Platt, AOL's senior vice president of integrity assurance and chief trust officer, will play in this unit led by Boe.

Boe will report to Ted Leonsis. A high-ranking AOL veteran of 13 years, Leonsis will give up his day-to-day management duties as president of the Audience business in January, while retaining his role of vice chairman, AOL announced last week.

Joe Redling will be in charge of AOL's international, mobile and customer relations businesses. AOL needs to boost its international business and will announce a new international structure "soon", Miller wrote. Mobile efforts also need strengthening, because it's an area where the company hasn't had enough focus and investment, Miller wrote.

Jim Bankoff will continue in charge of AOL's programming and the AIM instant messaging service, while Kevin Conroy will oversee AOL-branded products such as the AOL.com portal, Web mail service and video offerings. Mike Kelly will continue to run the ad sales operation. These four executives will provide further organizational details about their teams in coming weeks.

Last month, AOL announced its intention to slash as many as 5,000 jobs worldwide, or just over a quarter of its workforce, anticipating the shrinkage of its access business.

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