AOL Reorganizes to Reflect Broadband’s Influence

NEW YORK America Online restructured its organization yesterday to reflect the growing influence of broadband in the company’s business operations and to advance its strategy of bringing more free AOL content on to the Web.

The Dulles, Va.-based Time Warner unit will now be split into access, audience and digital services groups domestically, with AOL Europe as the fourth division. Each will have its own P&L responsibility and its own marketing operations, a company representative said.

AOL CMO Joe Redling will continue to be in charge of the company’s agency relationships and brand positioning. Omnicom Group’s BBDO in New York handles the bulk of AOL’s advertising. Interpublic Group’s Initiative in New York is responsible for the company’s media planning and buying; its sibling, The Martin Agency, Richmond, Va., crafted a recent print campaign.

The AOL broadband unit, which had been run by Lisa Hook, is being dissolved. Hook is leaving the company to pursue other interests.

Neil Smit, who had been evp of member development, becomes president of the Internet access group, which includes the AOL service, the low-cost Netscape ISP and CompuServe.

The audience unit, led by AOL vice chairman Ted Leonsis, will build programming within the proprietary subscription service and also spearhead AOL’s ambitions to make its AOL.com Web site a stronger competitor to the news, entertainment and information services offered by rivals such as Yahoo! and Microsoft’s MSN. Michael J. Kelly, who runs AOL’s ad sales efforts as president of AOL Media Networks, will continue to report to Leonsis.

The third unit, digital services, will be headed by chief technology officer John McKinley, who adds the title of president. He will have responsibility for selling AOL’s a la carte services such as MusicNet, AOL CallAlert and VoIP, which allows telephone calls to travel over the Internet.

In addition, two AOL executives are leaving. Joseph Ripp, who had been vice chairman and chief operating officer of AOL, is returning to Time Warner headquarters in an undisclosed post reporting to Don Logan, chairman of media and communications at the New York-based company. Ripp was dispatched from Time Warner to AOL in 2001. J. Michael Kelly, who had been chairman and CEO of AOL International and Web services, is leaving the company.

The changes come as AOL prepares for approximately 700 layoffs in December to cut costs.