America Online's new chief is giving himself some elbow room in the executive suite.
Jon Miller, appointed chairman and CEO of
AOL Time Warner's
troubled online operations one month ago, is eliminating AOL's president and chief operating officer positions in yet another management shakeup.
The moves, which AOL says are designed for faster decision making and clearer lines of authority, mark the second reassignment in a year for AOL Time Warner's former chief financial officer, Mike Kelly. They also signal diminished responsibilities for Jan Brandt, the AOL marketing chief credited for burying America in a blizzard of AOL sign-up discs.
AOL says the moves will give Miller a more direct role overseeing the company's "key units," including the flagship AOL brand, advertising sales and the company's efforts to gain a greater share of high-speed, broadband Internet users.
Miller's management changes come only a few days after AOL Time Warner's latest acknowledgment that its online unit has failed to find firm footing in the wake of the collapse of the Internet advertising market. On Monday, AOL Time Warner
lowered America Online's financial projections from targets announced in April -- targets that were part of companywide guidance lowered from January. The AOL unit is also under investigation by the
Securities and Exchange Commission
, AOL Time Warner revealed in July, regarding allegations of generous revenue recognition policies.
On Thursday, AOL Time Warner shares fell 41 cents to trade at $12.84. The company's stock is down 67% from its 52-week high, but up from this summer's low of $8.70.
Among the changes, Kelly, AOL's chief operating officer, will become chairman and CEO of AOL's money-losing international division. He will also be responsible for the company's "AOL Anywhere" effort designed to increase use of the service via devices other than PCs.
Once America Online's chief financial officer, then AOL Time Warner's CFO when that company was formed in early 2001, Kelly was reassigned to the AOL unit last November, following a year in which the company disappointed Wall Street by missing its confident pre- and post-merger financial goals for 2001.
At the time, AOL Time Warner dismissed characterizations of Kelly's move as a demotion, saying he was uniquely qualified to help the online service work with AOL Time Warner's other units on cross-divisional, multimedia efforts.
This time, says AOL spokesman John Buckley, Kelly's new "critical" responsibilities "reflect the importance of the functions, as well as the priority placed on keeping Kelly as a senior member of the team."
Paying Their Way
Making the transition to senior advisers to AOL are Ray Oglethorpe, current AOL president, and Jan Brandt, chief marketing officer. Miller praised Brandt as a "marketing legend," as part of his announcement Thursday. "She championed the use of the famous AOL disk enabling millions of people to get access to the online world in a faster, easier fashion than they might ever have imagined."
AOL's current chief financial officer, Joseph Ripp, is being elevated to the office of vice chairman, replacing Brandt. He'll continue to oversee the company's finances as it searches for a new CFO. Remaining in his current spot as vice chairman is longtime AOL executive Ted Leonsis.
Relevant to the company's advertising-related troubles, interactive marketing head Bob Sherman, who previously reported to the Jimmy de Castro, head of the flagship AOL service, will now report directly to Miller. That change is symbolic of the importance that Miller attaches to the unit, says Buckley.
In addition, employees of AOL's business affairs department -- the unit whose deals appear to be at the focus of inquiries into AOL's past revenue recognition policies -- are being assigned to other units. The company was already heading toward a "decentralization" of business affairs, says Buckley. "The tumult of the last several weeks has simply accelerated that process," he says.