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The Five Dumbest Things on Wall Street This Week

2. Mailing It In

AOL is ready to get mail at an exciting new address.

The struggling Time Warner (TWX) unit rolled out a host of changes this week aimed at building its lagging Internet advertising business.

AOL realigned its ad network into a new entity called Platform A, which the company promises "will offer advertisers access to the most sophisticated targeting and measurement tools available in the marketplace." AOL also set a distribution agreement with Hewlett-Packard (HPQ) and moved its headquarters to New York from Dulles, Va.

"New York City is the center of advertising," said AOL chief Randy Falco, "so it makes perfect sense to locate our corporate headquarters here."

It really does, though naysayers might dwell on the timing. Years ago AOL was the pioneer in the Internet access business. Its "You've got mail" slogan became a familiar catchphrase and the title of a popular movie.

But for all its success, AOL failed to quickly respond to the rapid expansion of Net advertising. That cleared the way for the rise of Yahoo! (YHOO) and, of course, Google (GOOG).

Even though its rivals' gains long ago relegated AOL to the status of mere curiosity, execs continue to labor under the impression that they're on the cutting edge.

"With these changes," Time Warner operating chief Jeff Bewkes said, "Randy Falco, Ron Grant and their team have positioned AOL to benefit fully from the trends that are reshaping the online advertising business and to expand AOL's leadership in it."

AOL has got mail, but what it needs is a clue.

Dumb-o-Meter score: 88. How does AOL plan to "grow its advertising business and increase the size and engagement of its worldwide audience"? Why, in part by "right-sizing the company's cost structure," of all things.

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