AOL Cuts 90 From Interactive Marketing

Just a day after naming a key executive to its interactive marketing department, AOL has laid off 90 from the group, or about 15 percent, according to a source close to the company. The interactive marketing group will be left with about 550 employees.

The layoffs affected the interactive marketing group’s sales and support staff both in New York and Dulles, Va., as well as some regional offices, the source said.

The job cuts are the second round of the year, following AOL’s May layoff of about 100 staff. They also come a day after AOL announced that Lisa Wilson, who worked with AOL chief Jonathan Miller at USA Interactive, would join the group as executive vice president. Wilson, who shares a background with Miller in e-commerce, is expected to focus AOL on weaving e-commerce opportunities into its marketing programs, at the expense of its traditional sales method.

AOL already has altered the way its sells ads, concentrating on geographic regions instead of industry verticals, in an attempt to rebuild advertising revenues that have declined dramatically since the Internet boom days.

A source close to the company said the new geographic focus, which was instituted under the head of interactive marketing, Robert Sherman, is part of a plan to place sales staff in positions that keep them in closer contact with advertising clients.

Meanwhile, the interactive marketing group, and AOL in general, have been in managerial turmoil as the company works to put accounting probes behind it and forge new directions under the direction of new senior management.

Wilson’s hiring came after James de Castro, the head of the interactive division, left the company a week ago. In the months after Robert Pittman resigned as chief operating officer, many of his top lieutenants, including cross-media advertising chief Mayo Stuntz, have been eased out.

AOL is in the midst of a strategic review, at the behest of corporate parent AOL Time Warner , in order to come up with a plan for dealing with a persistent online ad downturn. In its latest financial quarter, AOL’s advertising revenues fell nearly in half compared to the year earlier. The company has also scheduled a discussion with Wall Street analysts on December 3rd.