4 Top AOL Officials Resign Abruptly
Saturday, December 16, 2006
Four top executives at AOL abruptly announced their intentions to leave the company yesterday, just days before new chief executive Randy Falco is expected to announce a major restructuring at the top.
Joe Redling, chairman of AOL international and president of AOL mobile; James P. Bankoff, executive vice president of programming and products; Randy Boe, former general counsel and executive vice president of consumer advocacy and privacy; and John Buckley, executive vice president of corporate communications, will leave the company within days, according to sources familiar with the situation who spoke on the condition of anonymity because it involved personnel changes.
Spokesmen for AOL and parent company Time Warner declined to comment on the changes.
The uncertainty at AOL left employees to draw different conclusions about what the executives' departures mean for the future of the Internet company. Some people saw the moves as a natural sign that Falco, former president of NBC advertising, intends to bring in his own management team. Others speculated yesterday that the volume of departing executives signaled a plan by Time Warner to sell AOL to a company such as Microsoft looking to expand its Web audience.
Time Warner spokesman Ed Adler quickly dismissed that idea. "We've said consistently that AOL is not for sale," Adler said. "It's a vibrant part of our company, and the new strategy is working."
The senior executives' departures come at a time when AOL is under pressure to quickly adopt a new business strategy while dramatically reshaping its workforce. On Wednesday, 450 employees were laid off as part of a previously announced plan to eliminate jobs related to the old membership-based business model. Next week, possibly Monday, Falco is expected to announce a new organizational structure for the company.
One employee, who spoke on condition of anonymity because he was not authorized to speak to the news media, speculated that Falco was brought in to clean house and that "one of the options on the table is to make the company look presentable for a compelling case for a sale. Six to nine to 12 months from now, it would be made known that AOL is well suited to be a perfect fit for another company's online media arm. And it would go to the highest bidder."
The four departing executives join a list of other top leaders who have left or announced plans to leave. John McKinley, chief technology officer, has said he will leave the company by the end of the year; Jason Calacanis, who led the company's overhaul of Netscape.com in June, departed for a venture capital firm several weeks ago; and Ted Leonsis, longtime executive and president of company's "audience" business, said he would leave his position by year's end. Leonsis plans to stay on as vice chairman.
Some AOL employees said the changes at the top reflect a larger feeling that AOL will be managed more closely by the parent company in New York. Falco lives in New York and commutes to AOL's Dulles campus during the week.
Falco has not announced his own plans for AOL yet. He appointed Ron Grant, senior vice president of operations at Time Warner, as president and chief operating officer of AOL. That appointment freed some of the other top executives who reported to former chief executive Jonathan Miller to leave the company, sources familiar with the situation said yesterday. Several executives had contracts stipulating that they remain at AOL as long as they reported to the company's chief executive.
The outgoing executives were supporters of Miller, who was ousted last month despite being largely credited for helping AOL change its business strategy. But they were not leaving out of loyalty to him, several sources said yesterday. After two years working with Miller and having put years of effort into trying to turn the company around, it was time for a change, these people said.
"This is not a company where everything's been easy the last five years," said another AOL employee who spoke on condition of anonymity. "We've had to fight for every inch of progress we've been able to make."