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Time Warner Inc has named Tim Armstrong, Google Senior Vice President, as its new Chairman and CEO of AOL, in a move it hopes will help the company improve its advertising sales and prepare it for a spin-off.

Tim Armstrong

Wall Street analysts see the hire of Armstrong as a solid step in the right direction for AOL. Armstrong joined Google in 2000 and most recently was head of North American and Latin American advertising sales. He is known for his work in developing Google's advertising business.

"Tim is the right executive to move AOL into the next phase of its evolution, said Jeff Bewkes, Time Warner Chairman and CEO.

"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".

Armstrong will be replacing current AOL Chairman and CEO Randy Falco and President and COO Ron Grant. Falco and Grant will stay on with AOL through a transition period.

"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, said Bewkes.

Google has a 5 percent stake in AOL since investing $1 billion in 2005. Earlier this year Google sent Time Warner a request to exercise its " demand registration rights." Under its investment agreement Google can make the company buy back its share or take AOL public.

"AOL has a wide-ranging set of assets and audience," said Armstrong. "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."