AOL retools as it focuses on hunt for ad revenue

September 22, 2006|Associated Press

NEW YORK -- AOL will disband a unit that handled subscriptions and give product managers more autonomy over designing services for consumers as the company increases its emphasis on generating advertising revenue.

AOL will also name its first chief privacy officer, in the wake of a much-criticized disclosure of the search terms used by more than 650,000 subscribers.

The changes, outlined by chief executive Jonathan Miller, take effect in January and represent the first major restructuring since November 2004, when the Time Warner Inc. unit started making news articles, music videos, and other materials available for free.

At the time, AOL reorganized into four business units, including separate ones for access and audience, its term for drawing eyeballs to ad-supported websites.

``It is my belief that this structure served us well but no longer reflects what we are doing," Miller wrote to employees. ``Starting last month, our whole company became an `audience' business."

AOL decided last month to give away AOL.com e-mail addresses and software once reserved for paying customers -- to prevent AOL subscribers from defecting to free ad-supported services elsewhere. It will still provide dial-up Internet access but is no longer actively marketing the service.

Miller added that the company still plans to expand its international presence.