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On the back of its latest executive appointments — a new head of sales, and a new head of HR — AOL (NYSE: AOL) is pressing on with more reorganizing as CEO Tim Armstrong tries to turn around the fortunes of the jack-of-all-trades online company.
According to an interview with Armstrong in Bloomberg, the company is planning to combine its U.S. dial-up business with its web services business, which includes AOL’s mobile operations, and have the new unit report directly to the CFO, Arthur Minson. The change is expected to be announced formally to staff tomorrow, Wednesday, December 14; the other business divisions in place currently at AOL — advertising, local services and the Huffington Post media group — will remain the same.
Ned Brody will oversee advertising; Arianna Huffington will be in charge of her eponymous division and Jon Brod, founder of the Patch service, will leave his role under Huffington at present to head up local.
The news comes one day after the company recruited John Reid-Dodick from Thomson Reuters (NYSE: TRI) as its new “chief people officer,” and two days after it announced that Jim Norton would be promoted to head of sales for the company.
Bloomberg notes that while AOL is not planning to sell off any of its assets at the moment, the reorg could also be a way of packaging up the dial-up and web services assets in the event that they are eventually spun off for the company to concentrate on content and advertising services around it.
This new division reporting to the CFO is something that AOL had in effect already put in place in November, when Brad Garlinghouse abruptly resigned as president of applications and commerce at the company: at the time, AOL put Garlinghouse’s division, which included mobile, under Minson’s command. Minson had already been overseeing the dial-up business.
Putting web services under the control of a CFO doesn’t exactly sound like AOL is getting ready make any bold or innovative (read: investment-intensive) changes in the immediate future. What it does sound like is that the company is trying to get its costs under control and look for existing areas in the applications business that might get better exploited for revenues.
Even with the huge takeup in broadband, the company still, remarkably, has 3.4 million subscribers paying $17.50 every month to access the internet via AOL’s dial-up services. That works out to $59.5 million per month in revenue.
Meanwhile, AOL is seeing precious few dividends coming from its web services. Now, we may see Minson try to re-jig those operations to yield returns more like those of that dial-up business. We’ve noted before one that exists already: the carrier deals that AOL has to provide AIM via text messages, which already mean that AOL Mobile is a profitable operation. Minson, if he remains in the role longer-term, may try to look at how AOL could align other existing products in a similar way.