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.

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