AOL Reorganizes Operations Into Three Distinct Units

Yesterday, AOL began buying back shares of common stock, spending up to $400 million in a dutch auction style sale. Stockholders stand to receive, or have received, as much as $30 per share. Today, AO...
AOL Reorganizes Operations Into Three Distinct Units
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  • Yesterday, AOL began buying back shares of common stock, spending up to $400 million in a dutch auction style sale. Stockholders stand to receive, or have received, as much as $30 per share.

    Today, AOL is introducing some more changes. They are reorganizing the company, and from here on out, they will function as three distinct operating units. The three divisions are Membership, Brand, and Advertising.

    Artie Minson, the company’s current CFO, has been promoted to COO, and he will oversee all three divisions. Minson recently assumed control of AOL’s mobile, search and content businesses, in addition to his regular work with operations and made significant headway. He will balance all these responsibilities in his new position until a suitable replacement can be found to alleviate his workload.

    Tech Crunch, who is owned by AOL, has the inside scoop on what the three divisions will look like and what their responsibilities will be. The membership division will handle current members, whether paying or free.

    The Brand division will deal with content and other media resources they own like Tech Crunch and the Huffington Post. Advertising, or Advertising.Com as they are calling it, will be dealing with ads and marketing, as on might expect.

    Here are a few segments from CEO Tim Armstrong’s memo to his AOL staff regarding the changes:

    To kick-off the second half of 2012, today, the company is announcing the plan to organize into three operating groups and a corporate group that supports those three operating units. The operating units will be AOL Membership, Brand Group, and the Group. The goals of organizing around these operating units are the following:

    1. Build and distribute the world’s best digital brands (B2C and B2B)

    2. Center our measurement, resource allocation, and drive to profitability around brands

    3. Focus our technology and product development on building brand platforms

    4. Improve our O&O and network advertising and commerce revenue

    5. Go faster, unleash talent, and have fun

    Supporting the three operating units of our business will be a shared technology and sales platform, as well as AOL corporate functions. As a company and a culture, brands (including the AOL brand) will be the central focus and measurement point for us and we will continue to move the supporting resources closer to the brands. We want our brands to be driven by leaders who will achieve an even greater focus on our consumer experiences while also driving increased accountability, financial performance, and execution.

    Here’s how Armstrong described the new operating units:

    * The AOL Membership Group will house the businesses that serve AOL account holders – our free and paid members. From to AOL Mail to our consumer products that our users rely on, the AOL Membership group will be focused on delivering world-class experiences to our loyal users who rely on these AOL products and properties everyday.

    * The Content Brand Group will house our portfolio of distinct and unique content and service brands. We have a valuable portfolio of world-class content brands, and we want each of these brands to have distinct plans for innovation and profitable growth. Our brand portfolio delivers unique content experiences to their audiences daily, and the leaders in this operating unit will be laser-focused on driving profitable brands that serve real consumer needs.

    * The Group will house our B2B services and network businesses (the platforms we provide to our partners). The Group had our strongest revenue growth for the past couple of quarters and the product innovation and scale we are driving for our partners both on the publisher and advertiser side demonstrate that the Group is positioned for continued growth and acceleration of their business.

    We’ll keep you updated on any changes to the reorganization or AOL’s dutch auction style stock buyback. Things are bound to change again soon, after all, this is the second time the company has reorganized since December.

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