By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, March 17, 2008
Just as soon as AOL veteran Lynda M. Clarizio was promoted last week to lead Platform A, the company's ambitious online advertising network, firecrackers started to go off around her.
Jeffrey L. Bewkes, chief executive of AOL's parent, Time Warner, sent his strongest signal yet that he'd consider selling the Internet subsidiary. AOL announced it would plop down $850 million to buy Bebo, the No. 3 U.S. social network. And fresh questions were raised about whether AOL's disparate advertising companies could work together.
Clarizio, 47, a Potomac resident who has spent her professional life in Washington, officially starts today as president of Platform A. The unit, a mix of advertising companies AOL has assembled in recent years, is the centerpiece of Time Warner's plan to reinvigorate the company, which has struggled to grow as its legacy dial-up business has experienced sharp declines.
For Clarizio, the events of last week reinforced the urgency of her task.
"This is probably the most dynamic industry in the world right now, the online advertising space," she said in an interview Friday. "To compete effectively in this space, you have to be constantly pushing, innovating new products."
As a top AOL executive for nine years, Clarizio has had a hand in buying well over $1 billion worth of advertising companies. In 2004, AOL spent $435 million to buy Baltimore-based Advertising.com, where Clarizio most recently was president. AOL has since acquired a handful of other advertising companies.
Clarizio said her priority is to unify the various acquisitions, so AOL can offer advertisers a one-stop shop offering access to AOL-owned properties, third-party sites and mobile phones. AOL moved its headquarters to New York this year as part of the transition, though it maintains a sizable presence in Dulles.
Yet even as AOL has strengthened its advertising network, the various acquisitions have not meshed seamlessly. The most palpable tension involved Tacoda, a firm bought last year that developed technology to serve ads based on the Web sites a user visits. Advertising.com employees were working on similar technology and some opposed the purchase.
Still, Tacoda's president, Curtis G. Viebranz, was named the first head of Platform A when the network was announced in September. A person familiar with the matter said AOL chief executive Randy Falco felt Viebranz didn't move fast enough to integrate the ad units, ignoring some acquisitions and pushing for the sale of Advertising.com, considered by top management to be the company's crown jewel. The source spoke on the condition of anonymity because the person was not authorized to disclose internal discussions. Viebranz did not respond to a voice mail message.
"The promise of the platform is truly integrated marketing," said David Hallerman, an analyst at New York-based eMarketer. "It takes a while. This is not just buying technologies. It's buying human constructs, and it takes a while to work out."
Clarizio recognizes the difficulty of meshing all the units, she said.
"What we're trying to do is operate as one business as opposed to several different businesses," she said.
However, she said it was crucial that AOL push forward, given the challenge from Google, which is moving closer to completing its acquisition of display-advertising king DoubleClick, and Microsoft, which has bid for Yahoo. The potential Google-DoubleClick and Microsoft-Yahoo networks would dwarf AOL's online ads sales many times over.
Clarizio, who will continue to work out of Advertising.com's Baltimore headquarters, in an old Procter & Gamble building, comes to the task with experience in several elements of AOL's business.
A Princeton graduate and Harvard-trained lawyer, she came to Washington in 1985 to work on international law for white-shoe firm Arnold & Porter. She married a career Foreign Service officer, who most recently served as a top Commerce Department official, and turned to the local business scene when she had kids and wanted to stop traveling as much.
In 1996, AOL became her client. She had never heard of the company; she went to a bookstore to buy a book explaining the Internet.
In 1999, when AOL was the dominant Internet company in the country, she joined the firm, focusing on mergers and acquisitions. In that capacity, she learned the challenges of merging cultures, particularly after AOL's purchase of Time Warner in 2001. At the time, it was hailed as a brilliant move, but the marriage did not go well.
"We learned a lot about what works and what doesn't work," Clarizio said. "Culture issues play a big part of it."
When she took over Advertising.com in 2006, she faced culture issues anew. But she is credited with managing them deftly.
"A lot of folks said, 'Well, we lose some of the entrepreneurial spirit that we had now that AOL has got more involved,' " said Don Kennedy, the top sales executive at Advertising.com. "She was really dedicated to keeping the culture here and keeping the communication going."
Rob Luenberger, Advertising.com's chief scientist, said Clarizio understands that to succeed, Platform A must make clear to customers it can offer something different -- the best technology to target ads.
"We have world-class scientists working here, . . . and she embraced that," he said.