AOL Ad Sales Chief Steps Down

More tremors struck America Online’s ad sales division. Interactive Media Executive Vice President Lisa Brown is departing after only eight months on the job, according to sources at the Time Warner division.

The Wall Street Journal reported Brown blamed “health and personal reasons” for her departure. But the report also cited unnamed sources as saying Brown was under company investigation for over $40,000 in questionable expense reports. Brown didn’t return phone calls by press time and AOL officials wouldn’t comment.

Michael Barrett, currently executive VP of interactive marketing and national sales director, is expected to take over the bulk of Brown’s responsibilities, according to sources inside the company. AOL is also talking to Time Warner ad sales executive Michael J. Kelley about taking a larger role, which would have him supervising Barrett, these sources said. Barrett wasn’t available for comment. The company is expected to make an announcement about the change of leadership shortly.

Brown made headlines during her short tenure by promising the company had abandoned the bullying tactics that characterized it during the dot-com boom. AOL booked big revenues when Internet advertising was the darling of companies financed by venture capital dollars, but it’s suffered since. The company was especially hard hit by the expiration of long-term contacts signed during the boom years.

Brown, who previously worked for InterActive Corp. (formerly USA Networks), was hired by AOL in 2002 to help then-ad sales chief Robert Sherman oversee a turnaround in the ISP’s ad sales operation. When Sherman went back into retirement in the spring of 2003, Brown stepped into his role. Brown’s departure comes as a relief to some of her subordinates, who chafed under her management style. Some of her staffers privately expressed jubilation this morning upon hearing the news.

Though AOL’s ad sales numbers look dismal due to of the expiration of those long-term contracts, the company has maintained it’s met some success in turning ad sales operations around. Barrett recently boasted the company was winning more agency clients, bringing in more revenue, and running more campaigns.

At a recent investor conference hosted by Smith Barney Citigroup, Time Warner CEO Richard Parsons said he expects AOL to continue to benefit from the growth of the online advertising business in 2004. That growth, however, is expected to come largely from AOL’s revenue-sharing agreement with Google, whose AdWords listings appear on AOL’s search pages. But Parsons was still optimistic about third-party advertising.

“We were actually up this year [2003] over last year [2002], and we expect to be up double digits next year [2004] over this year, so we expect to see the basic third-party advertising piece of the pie growing,” he said. “It’s not growing as rapidly as the search piece, but it’s growing and we feel very good about it. “

AOL’s efforts toward an ad sales turnaround have been met with some skepticism in the media buying community. Elimination of the agency relations director post in particular rankled some agency media folks. Others in media buying, however, think AOL has made great strides.

Barrett will oversee AOL’s transition from a one-product shop to one that can offer advertisers a wider variety of niche options. Besides launching AOL 9.0 Optimized, which includes a version for broadband users, the company in 2003 debuted services aimed at kids (KOL) and U.S. Hispanics (AOL Latino). It’s also working on a service for teens, called Red, and it’s reportedly looking at buying from the Tribune Company.

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