Kara Swisher

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AOL Layoffs Memo: BoomTown Decodes the Memo, So You Don’t Have To!

Yesterday, BoomTown broke the official news that 2,000 employees (out of 10,000 worldwide) would be made redundant at AOL.


Sure, we’ve asked for the obligatory on-the-record interview with CEO Randy Falco (pictured here), who made the announcement of the layoffs. But while we’re waiting by the phone, we need to get busy.

Thus, to continue our quest to clarify the muddy-waters situation at the long-struggling Internet portal, we are going to decode the memo Falco sent out to AOL’s troops.

(Back in late August, we also translated a memo from Yahoo President Sue Decker about its reorganization of management.)

Here’s my take on Randy’s take:

Randy wrote: Dear AOL colleague,

Translation: Um, what was your name, again?

Randy wrote: Just over a year ago, AOL embarked on an incredibly complex and significant transformation as we fundamentally shifted our business model from a subscription-based ISP to an advertising-supported Web company.

Translation: Those where the days, my friend, we thought they’d never end, we’d sing and dance forever and a day. We lived the life we’d choose. We’d fight and never lose, for we were young and sure to have our way. Damn you, Steve Case!

Randy wrote: Today, I want to give you an update on where we are in this transition, and talk about further actions we’re taking and where we’re headed as a company.

Translation: Here’s a nice cardboard box! Fill it with your things, and pretend it’s just like Christmas! Curses to you, Bob Pittman!

Randy wrote: When I came to AOL, I knew we had to take several steps to complete our company’s transformation.

Translation: That smooth-talking Jeff Bewkes said it would be a walk in the park compared to selling ads for a dying television network. Fie on Myer Berlow’s bowl-making!

Randy wrote: We aggressively expanded our advertising capabilities, building on the strength of Advertising.com and our premium ad sales force. We acquired three leading-edge advertising companies–ADTECH, Third Screen Media and TACODA–and formed Platform-A. AOL now has one of the largest and most sophisticated ad networks in the world, and we’re well positioned to compete where the ad market is heading.

Translation: Let’s try hard not to give former CEO Jon Miller any credit whatsoever for the prescient move of buying Advertising.com, the site that has saved our collective bacon. That Kenny Lerer’s lucky he has Arianna to protect him!

Randy wrote: We rebuilt and revitalized our key products, programming channels and platforms. And unique visitors to AOL.com, News, Food, Money & Finance, TMZ, Moviefone, MapQuest and many other sites are up. Our products are once again creating buzz in the market. And to reach the widest audience possible across the Web, we’re unbundling our products and programming so users can take them along wherever they go online.

Translation: No walled garden? The kids like these newfangled widgets? Thank God for the trifecta of celebrity meltdowns–Paris Hilton, Lindsay Lohan and Britney Spears–for keeping TMZ in traffic! Now if I could only get Miles Gilburne in a room with Danny Bonaduce!

Randy wrote: Importantly, we’re taking the business global. We’re extending AOL’s reach into seven new countries this year while globalizing our product development efforts. By the end of next year, AOL will have a presence in 30 countries. That’s a remarkable achievement in a relatively short period of time.

Translation: Yes, I am sure the Chinese haven’t quite figured out that AOL now stands for An Old Lady (of the Web). Oh, you’ll get yours, David Colburn!

Randy wrote: We refocused the business around three core areas–Platform-A, Publishing and Access–and are now managing these as three distinct but related components.

Here’s why this is important. With Platform-A, we can offer advertisers the most advanced set of solutions across our extensive network of owned-and-operated sites and third-party sites. Publishing provides us the products, programming and platforms we need to sustain a healthy owned-and-operated network. And our Access business continues to be profitable, providing us cash flow to invest in other areas of the business, and it’s an important source of primary emails and page views.

Translation: I am fairly certain those annoying nerds at Google can’t just decimate us with their solar death rays in these arenas. Plus, what idiot is going to get into the access business? I’d like to give Matt Korn a busy signal!

Randy wrote: The last important piece in this transition is the realignment of our costs against these three businesses so we can operate as efficiently and effectively as possible. This is in many ways the most difficult step, but a necessary one.

Translation: Here it comes…

Randy wrote: As a part of this realignment, tomorrow we begin a reduction in force that will, over the next couple of months, affect a total of about 2,000 people out of our worldwide workforce of 10,000.

Translation: Ouch. That hurt. Well, you, not me.

Randy wrote: Everyone impacted by this reduction deserves our thanks and respect for their contributions to the company. We will aid these individuals in their transition to new opportunities as much as possible, most importantly with what we believe are generous severance packages.

Translation: Free AOL access for all! Oh, it is free! Well, freeeeeeeeeer!

Randy wrote: This realignment will allow us to increase investment in high-growth areas of the company–as an example, we added hundreds of people this year through acquisitions–while scaling back in areas with less growth potential or those that aren’t core to our business, as we did with the sale of Tegic.

Translation: This is worse than not being able to program Thursday night!

Randy wrote: So where is this taking AOL? Put simply, my vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.

We’re only a year and a month into our transformation, and the turnaround has been dramatic. We’re now in a position to win as an advertising-supported business. We have a bright future as a company if we can execute on this vision.


Translation: Maybe, oh, maybe Mark Zuckerberg will buy us with his lunch money!

Randy wrote: Randy

Translation: Mr. Burns. (You know Smithers, oops, Ron Grant wrote this, don’t you?)