RealTime IT News

AOL Splits in Four

America Online will reorganize around four business units to improve decision-making, a spokesman for the ISP said.

The units -- Access, Audience, Digital Services and AOL Europe -- will be responsible for their own budgets and marketing efforts.

"[The reorganization] is really about how people use the Internet," said AOL spokesman Jim Whitney, adding that the groupings were logical.

The access unit includes dial-up and broadband services, while the digital services will focus on value-added offerings like music and eventually Voice over IP services, he said.

The audience group will oversee Web properties like maps and instant messaging, and will look to grow advertising and search revenues. AOL Europe will cater to the ISP's 6.3 million continental customers.

AOL also made management changes. Three executives will leave their current posts by spring: J. Michael Kelly, CEO of AOL international; Lisa A. Hook, who leads AOL's broadband efforts; and Joseph A. Ripp, the unit's COO and vice chairman.

Ripp who has been a regular commuter from his Connecticut home to AOL's Vienna, Va., headquarters, will return to AOL's parent company Time Warner in New York, where he once served as CFO.

The shakeup comes as AOL seeks the right mix of products and pricing to halt sliding subscriber stats. For example, it recently confirmed that it is testing VoIP service.

Though a little late to the VoIP game, AOL still has 23 million subscribers, 4 million of whom have broadband hookups, which is a prerequisite for Internet telephony, as well as a number of other applications that ISPs could charge more for.

The restructuring is effective immediately, though full implementation will likely take several weeks.