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AOL to Be Split Into Four Units

Overhaul Comes Before Job Cuts

By David A. Vise
Washington Post Staff Writer
Tuesday, November 9, 2004; Page E01

America Online Inc. yesterday put new leaders in senior posts and revamped its corporate structure, undertaking a sweeping overhaul just one month before the company plans to slash costs by firing more than 700 employees.

The far-reaching changes, directed by chief executive Jonathan F. Miller, will result in the departures of three of the Internet firm's most senior executives from its Dulles headquarters. In an e-mail to thousands of employees, Miller made it clear that he intends to shake-up an online giant that has been criticized for moving too slowly and not doing enough to foster teamwork.

CEO Jonathan Miller says the changes will allow "crisper" decision-making. (File Photo)

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In addition to making several personnel changes, Miller said he is splitting the company into four divisions and giving each responsibility for its own operations and financial performance.

"We are going to try to be much crisper in decision-making," Miller said in an interview. "It is about having clarity of mission and purpose."

Three executives -- Lisa A. Hook, who headed the company's high-speed, or broadband, initiative; Vice Chairman Joseph A. Ripp, who oversaw technology and marketing; and Michael J. Kelly, who served as chief financial officer in the aftermath of the much-maligned merger of AOL and Time Warner, are all leaving America Online. Ripp is returning to AOL's parent company, Time Warner Inc., in New York, where he worked previously.

AOL veteran Ted Leonsis will continue in the senior ranks as vice chairman. Leonsis, who also owns the Washington Capitals hockey team, will head a new division dubbed "Audience." It will focus on profiting mostly by selling advertising that reaches users of AOL's various Web sites and products, including AIM, AOL's free instant messaging service; Moviefone; Mapquest; Netscape.com; and a revamped AOL.com Web site.

"I hope to pour a little accelerant on it," Leonsis said of his new responsibility. "There is no job here in the last dozen years I haven't done. I told Jon I would do whatever he needed me to do."

Miller said the new team would take charge immediately. In the past, AOL has been a "fractious company" that moved too slowly to make changes, Miller said. The more decentralized structure is aimed at facilitating faster decision-making and speedier implementation of initiatives.

"In the days ahead, when our transition to a new structure has been completed, we will have a streamlined organization with clear roles and responsibilities," Miller wrote in his e-mail. "It will take some weeks for full organizational detail to fall into place, and I know this will make people uneasy, especially at a time like this when we have announced plans for layoffs."

AOL has said it plans to fire more than 700 people in early December, more than half of whom work in Northern Virginia, where the company has about 5,000 employees.

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