BoomTown » Jerry Levin

Google Names Company Veteran Dennis Woodside to Replace Tim Armstrong as Ad Lead

Kara Swisher — Tue, 17 Mar 2009 23:16:09 +0000

That was fast.

Longtime–well, five years, which is a dog’s age at the search giant–Google sales exec Dennis Woodside (pictured here) will become VP, Americas Operations, replacing outgoing exec Tim Armstrong, who was named chairman and CEO of Time Warner (TWX) online unit AOL last week.

Woodside, 40, will start in the next few weeks, said Google (GOOG) in an internal communication about the appointment, as Armstrong transitions from Google to AOL. It is the key advertising sales job at Google.

Armstrong has already been hard at work at AOL, in fact, leading an employee rally today at its former HQ in Dulles, Viriginia, which included former AOL execs Steve Case and Ted Leonsis.

(And he will hold a similar meeting at AOL’s New York office tomorrow, BoomTown has been told. But let’s hope he does not roll out, say, former Time Warner CEO Jerry Levin, which would be taking this old-home-week stuff too far!)

While Woodside is a well-known exec within Google, his name was not as prominent in the speculation about which internal Googler would be named by CEO Eric Schmidt to replace the well-known Armstrong.

Wrote MediaMemo’s Peter Kafka last week, for example, when the Armstrong departure was announced:

“According to a (very informal) flash poll of Googlers, ex-Googlers and Google competitors I conducted last night, the answer should be obvious: David Rosenblatt, the former Doubleclick CEO, who now runs Google’s display business.”

Woodside will also have a slightly lesser title than Armstrong, who was a corporate SVP, was president of the America Operations and was also on Google’s powerful operating committee.

But that’s part of the changes, mentioned in a long statement by even bigger sales boss Omid Kordestani, SVP, Global Sales & Business Development, to whom Woodside will report (the key graph is the last one, although the golf dig is funny):

In the five and a half years that Dennis has been at Google (that’s over half our company’s lifetime) he’s brought incredible integrity and entrepreneurialism to everything he’s done. I remember Dennis setting off from Mountain View in 2005, a year and a half after he joined, to start our direct sales operations in Eastern Europe, which he quickly transformed into a substantial part of our business. He also set up our Inside Sales Operations in Dublin – again building it from scratch. In September 2006, he became our Vice President for the UK, Ireland and Benelux where he’s helped to create a first class team as well as establish very positive relationships with our big partners on both the advertiser and agency side, including 02, Marks & Spencer, Amazon and Omnicom.

Ever since I met Dennis in 2003, I have been impressed by his combination of entrepreneurialism and operational excellence. He’s never afraid to try new things and always ready to roll up his sleeves and pitch in–whether it means moving his desk to sit with the UK DSO team to see the operations first hand, or being the customers’ advocate internally to help product and engineering better understand market trends. Outside work he loves to do triathlons–though I would only recommend training with him if you don’t mind being out-run (if you are looking to beat him, try golf).

While we are all sorry to see Tim move on, change always brings new opportunities. We believe it’s now time not just to roll-out globally the best practices from the different regional sales teams–the Americas, EMEA and Asia Pacific–but also to tailor our business strategies more closely to the different situations we face in different countries (more mature versus less mature markets).

How to Juice AOL: A Spin-Out, Of Course, But Also a Reunion at Dulles HQ?

Kara Swisher — Tue, 17 Mar 2009 01:32:45 +0000

As soon as he got his new job last week, new AOL Chairman and CEO Tim Armstrong sent out a rather hopeful email to the troops–his first communication as the latest leader of the ragtag online service.

“I’m really looking forward to seeing you and would love to hear your thoughts and suggestions,” wrote the former Google (GOOG) exec Friday (who alarmingly kind of resembles this Elvis image), “on how to make AOL and its sister properties the most powerful brands on the Internet.”

Well, one can hope!

To goose that dream, although he still does not officially start in the job until April 7, Armstrong is also addressing all the troops tomorrow at 11 am EST and has chosen to do so from, of all places, AOL’s old center of power in Dulles, Virginia.

AOL staffers I spoke to also hope most of all that Armstrong will quickly and transparently lay out plans for a spin-out of the Time Warner (TWX) online unit from the media conglomerate, where it has languished for years.

“Armstrong would not have taken the job if the plans for a spin out of AOL were not in place and it’s in everyone’s interests to signal that it’s a go right away,” said one source close to the situation. “The only catch is the poor economy, but even that should not prevent Time Warner from doing what’s right to finally fix AOL.”

And sources said Armstrong could further up the ante tomorrow and help raise the layoff-weary morale by having some former AOL execs from its glory days as the top online player in person at the event.

Several sources said one exec most likely to make an appearance is Ted Leonsis (pictured here), one of AOL’s most colorful top early execs and a longtime inspirational figure within its ranks.

Unlike most AOL execs from those days, many of whom were eventually run out on a rail, Leonsis also stayed on through its disastrous merger with Time Warner and beyond.

But, like all of the Dulles complex–which was once the bustling worldwide HQ for AOL–Leonsis finally left the company, after a falling out with the management regime that Armstrong just hipchecked out of power. He is now AOL’s vice chairman emeritus.

Both CEO Randy Falco and President Ron Grant moved AOL’s locus largely to New York, and minimized the staff and influence at Dulles, where most of AOL’s products have been made since its origins in the early 1990s.

“It’s a smart move to go to [the Dulles staff] directly first…the last regime pretty much shut them out…and that created bitterness, when we need to be unified,” wrote one AOL insider to me in an email.

(Sidenote: As the AOL beat reporter at the Washington Post back then, I actually went with then-PR head Jean Case to look over what became the Dulles facility, to see if it would be a good place to expand to; previously, AOL was located in nearby Vienna, behind a car dealership.)

A Leonsis visit at AOL will be like old home week, although some are hoping too that former AOL CEO Steve Case could also make an appearance. He and Leonsis still make online investments together.

But that might still be deeply controversial within Time Warner, where Case and also former Time Warner CEO Jerry Levin are widely blamed for situation that the company found itself in when the Web 1.0 bubble burst and AOL’s once vaunted valuation collapsed.

Although Case and Time Warner CEO Jeff Bewkes have since moved on, bygones have not been bygones within Time Warner.

And, while it is often denied by top execs, AOL has suffered because of ill-hidden grudges, which have partly prevented it from being revived, even as other Internet giants have been born in the interim.

Ironically, many of the current crop of shooting stars owe a lot to the pioneering and innovative AOL products, including: its AIM and ICQ instant messaging services, which echo an early version of Twitter; the “Buddy List,” which was all about friending; and its deep social networking roots, with chat rooms and profiles that were the Facebook of its day.

The question for Armstrong is: Can AOL go home again?

The $125 Million-Sweet DailyCandy Revenge of Bob "Pitchman"

Kara Swisher — Wed, 06 Aug 2008 13:55:09 +0000

Oh, there had to be much, much gnashing of teeth in the corporate offices of the Time Warner Center in New York yesterday with news of the sale of DailyCandy to Comcast for $125 million.

Why?

Maybe because that tasty payment is going right into the hands of Bob Pittman’s Pilot Group Ventures, which bought the fashion and shopping newsletter business for $3 million in 2003.

Longtime media exec Pittman was the former star AOLer, whose nickname was Bob “Pitchman” for his smooth-as-silk selling and even more marked spinning skills.

But the Web 1.0 supernova fell quickly to earth, after the online service merged with Time Warner (TWX) in early 2001, in what is now considered one of the more significant world-class corporate disasters.

After being tossed out of AOL Time Warner in mid-2002, Pittman (pictured here), along with AOL head Steve Case, was blamed for the stock decline and other woes at the media giant by the Time Warner side, whose deep bitterness toward him has never really faded away.

Now, with Time Warner trying to make a deal to sell the AOL unit for up to $10 billion to Yahoo or Microsoft–despite it being valued at $20 billion only a few years ago–Pittman’s small but impressive score has got to grate.

“I have been associated with the start-up, turnaround or acceleration of many companies and major brands, and rarely have I seen the kind of creativity, commitment and passion I’ve seen day in and day out at DailyCandy,” said Pittman in a letter to DailyCandy staff yesterday about the sale. “And the results speak for themselves: Since we made our investment in 2003, subscriptions have grown from just over 200,000 to over 2.5 million.”

In the letter, Pittman said the company’s EBITDA was over $10 million this year on revenues of $25 million.

This is certainly different from the situation almost exactly six years ago when Pittman was driven out of the then-named AOL Time Warner on the proverbial rail.

If you want a taste of those once-grim times for Pittman, here is an excerpt from my book, “There Must Be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest for a Digital Future,” which was published in 2003.

The section comes from Chapter Six, “Way, Way After the Goldrush,” as the deal imploded:

THERE’S NO BUSINESS LIKE NO BUSINESS

Despite the troubles, Pittman, Case and [former AOL Time Warner CEO Dick] Parsons grinned out from the June 2002 cover of AOL Time Warner’s internal magazine, called Keywords, under the headline “Lift Off!” Actually, “Grounded!” would have been a more accurate headline, given the problems that would mount over the summer.

That was especially true at AOL, where Pittman found that just about everything–from morale to ad sales to subscriber numbers–was trending downward at an accelerating pace.

He had grown weary of infighting at the company, exhausted from the traveling and worn down by the prospect that turning around AOL would take more work than he had ever imagined.

For three months, he’d been trying to revive AOL while still working as COO of the combined company. Pittman was stretched about as thin as he could go, and AOL was still sputtering.

“He had been getting a pounding and he did not see a way to turn it around,” said AOL marketing whiz Jan Brandt, whom Pittman had brought back into the top echelons of the company upon his return. “And there was no end in sight.”

Indeed, for Pittman, there was no end in sight for the time it might take to fix AOL, especially because of how badly he and his team had alienated the entire Time Warner management.

The New York Post even began running a regular “Pittman Meter,” an obnoxious graphic that offered assessments ranging from whether he was “toast” to “safe” on any given day.

Mostly, Pittman was burnt to a crisp.

With increasingly skepticism that he could fix the problems at AOL, Pittman went to Parsons before the July 4th holiday weekend and told him he wanted out.

“I can’t do this anymore,” said Pittman to Parsons, who urged him to think things through over the weekend.

But the weekend put him over the edge, when the New York Times–whose reporter, David Kirkpatrick, had become a favored outlet for disgruntled Time Warner executives to vent—ran a scathing piece detailing Pittman’s failure to turn things around at AOL and suggesting there was a target on his back.

“Executives and shareholders are united in more or less open revolt,” wrote Kirkpatrick. While the story referred to discomfort with the departed Levin too, it singled out Pittman explicitly.

“Most of all, Time Warner executives have turned their ire specifically at one man–Mr. Pittman, a former America Online executive who became chief operating officer after the merger,” it read. “He angered many Time Warner executives with what they called his brusque manner … he developed a reputation for brashness, ruthlessness and success at America Online, and he applied the same tactics at Time Warner on his return.”

As if channeling the Time Warner side’s anger, Kirkpatrick summed up their message: “Now many executives from the former Time Warner wish the merger would go away, and, barring that, they wish that Mr. Pittman would.”

In the article, Parsons was quoted offering a rather tepid defense of Pittman: “People get angry and that anger has to be attached to something or someone,” he was quoted as saying. “Some of it has been attached to Bob and I am not sure if it is entirely fair.”

Well, not entirely, Parsons’s quote seemed to indicate to me–but maybe it’s a little fair! This deft response definitely did not look good for Pittman.

And with Parsons firmly ensconced in the CEO position and no place higher up on the ladder for Pittman to go, what sense did it make for him to keep fighting what was, for the foreseeable future, a losing battle in which he would probably end up getting tossed out anyway?

With the executive ranks blaming him and the board losing faith that he could turn AOL around, Pittman had no chance of regaining any credibility as COO.

“Pittman left on own steam, but he knew what was coming,” said one board member, who actually admired Pittman.

Pittman wanted to announce he was leaving, but Parsons asked him to delay the news until the board could approve a new management structure in mid-July.

His plan was to promote Time Inc.’s Don Logan and HBO’s Jeff Bewkes to the top of the AOL Time Warner structure, effectively splitting Pittman’s duties into two positions, both of which would report directly to Parsons.

Logan would head the Media and Communications Group, the subscription and ad businesses that would include Time Inc., Time Warner Cable, the Interactive Video Unit, Time Warner Books and AOL.

And Bewkes would run the Entertainment and Networks Group, made up of HBO, New Line Cinema, The WB, Turner Networks, Warner Bros. and Warner Music.

Getting the pair interested in the arrangement would be difficult, given the recalcitrance both had felt toward the merger in the first place.

But it was critical for Parsons to pull this off, since Logan and Bewkes were considered the best and most successful operators in the company, though they were vastly different in personality and style.

Logan, who had been the CEO of Time Inc. since 1994, was one of the most admired managers in the company, especially within his division, where he was openly revered for turning around the fortunes of the magazine publishing house.

An Alabama native, he was the son of a housewife and a welder for the state highway department. Logan went to Auburn University as a math major, and worked his way through school as a computer programmer for NASA in Huntsville. He continued his studies–specializing in abstract math–at Clemson University, and went on to pursue a doctorate part-time the University of Houston.

While in Texas, he worked for Shell Oil, creating research tools in the search for oil, but he found big-company life too slow.

Answering an ad for a Birmingham, Ala., publishing company called Progressive Farmer, later renamed Southern Progress, Logan worked first in data processing and fulfillment and later in direct marketing.

Time Inc. bought Southern Progress in 1985, and Logan was running it by 1986.

Admiring Logan’s reputation for consistent results, [former Time Warner CEO Jerry] Levin brought him to New York in 1992 as Time Inc.’s president and COO. Logan got the CEO spot two years later.

Logan fulfilled Levin’s expectations by goosing the magazine division’s results dramatically, turning in 41 consecutive quarters of earnings growth and tripling its cash flow.

Logan managed all this while affecting a folksy Southern image as a good old boy who just loved to go fishing. (He had even appeared on the cover of Field & Stream in a feature about jungle fish.)

Pretty much everyone I asked about Logan felt the need to mention his fishing, as if it were mysterious and complex part of his nature–imagine that, a fishing math major!

In the company newsletter, Logan was quoted as noting that business was a lot like fishing, in that they both require “persistence and patience.”

The burly Logan might have had true “down home” bona fides, but he was as smooth as any city slicker in leading the potentially divisive troops at Time Inc.

His greatest strength appeared to be in leaving people alone, yet demanding performance as a price for that independence.

“He was a straight talker in a culture of bullshit and platitudes,” said former Pathfinder executive Linda McCutcheon. “And he believed you grew incrementally to greatness.”

The very qualities that were so admired at Time Warner were derided by AOL’s top brass, who considered Logan a typical Time Warner corporate timeserver and not much of a risk taker.

“He thought growing at five percent a year was a great accomplishment,” said the voluble [AOL ad exec] Myer Berlow. “He was not exactly the kind of person who welcomed us.”

The AOLers expected more rapport with Jeff Bewkes, the glib and good-looking head of HBO.

Much as everyone mentioned Logan’s interest in fishing, the word Time Warner people invariably used to describe Bewkes was “handsome.”

And he is indeed a handsome man, slim and tall with a curious mix of Hollywood glamour and vague preppiness that suited the more conservative elements of the company.

“Golden boy” had long been a defining image for Bewkes, who was a graduate of Yale University and Stanford Business School (again, that heady mix of traditional East Coast and trendy California).

The impact he made was a strong one–an executive comfortable with both Hollywood talent and deal makers alike.

Bewkes came to HBO many years previously, and worked in the finance and marketing departments. He was considered a winner even in his earliest days.

“We all used to assume he would eventually be the boss,” said a former AOL executive Mark Walsh, who worked with Bewkes at HBO. “He had this air of the inevitable about him that was very appealing.”

His star rose quickly and he eventually became the chairman and CEO of HBO, building a close-knit team around him that was responsible for burnishing the somewhat dull image of the pay-cable channel to an edgy sheen with such huge hits as “The Sopranos” and “Sex and the City.”

This conspicuous success quickly attracted AOLers, who identified with Bewkes’s more outgoing style and considered his passionate, entrepreneurial nature akin to their own.

They could not have been more wrong about his regard for AOL, though–Bewkes was one of the first executives to complain internally and loudly about the idiocy of the merger deal.

He wasn’t shy about challenging Steve Case’s dreamy ideas of convergence in company meetings, and he could pull it off because his HBO success gave him such credibility.

Bewkes’s ability to move with comfort through all parts of the company made everyone assume that he was headed for bigger things.

That included AOL, which Bewkes was asked to fix in early 2002. It was a position he’d quite smartly turned down, obviously aware that grabbing onto that sticky situation would hurt him.

Pittman really had no choice in being the one to take on AOL–although I joked to him when he went back to Dulles that he’d just been handed a tar baby that he’d have a hard time pulling away from without damage.

That was finally clear when the company announced his departure–which had been widely leaked in newspapers–on July 18.

As usual, his public statement had an odd mixture of spin and truth to it.

“I’ve decided that after a new CEO is in place at AOL, I won’t return to AOL Time Warner as chief operating officer,” he said. “Having worked so hard to build the AOL service and brand, and after then going through the merger and the last 18 months, it’s time to take a break.”

Managers and staff at other company divisions greeted the news of Pittman’s departure and the ascension of Logan and Bewkes with joy.

“The Taliban have been routed,” joked irrepressible Time Inc. Editorial Director John Huey, in what was a common sentiment.

Finally, Time Warner had taken back the company from the horrible invaders. The gloating ran rampant.

Media pundit and New York columnist Michael Wolff, who had worked with Time Warner on its various failed Internet efforts, took a dim view of the glee in his “This Media Life” column.

Wolff correctly asked: What had Time Warner really won by purging Pittman–who walked away with a fortune–and where would that leave the company?

“Of course, taking it out on the guy who outsmarted you does not, in turn, make you smart,” he wrote in his slap-down style. “[Pittman] doesn’t hang around a disaster area. This is show business. If the show flops, you close it. Onward and upward.”

AOL’s early CEO Jim Kimsey, who had long been enjoying his retirement, was even more direct, dialing Pittman up on the phone.

“Is this the unemployed Mr. Pittman? Because this is the unemployed Mr. Kimsey,” he greeted Pittman. “Congratulations–you moved Osama Bin Laden off the front page!”

But while Time Warnerites rejoiced in their hope that the merger turmoil was finally over, the company’s troubles wouldn’t leave the front pages for a long time to come.

We’ll see if that has changed at all, after Time Warner announces its second quarter earnings later today.

MicroHoo: History Lesson No. 1– Time Warner Tries to Buy Yahoo

Kara Swisher — Wed, 16 Apr 2008 22:44:00 +0000

While we are waiting for the season finale of the Microsoft-AOL-Yahoo takeover–too bad we can’t blame the writers’ strike for the lugubrious pace of this deal–BoomTown will take you back in time to equally edge-of-your-seat times in Internet history in a series of surprisingly familiar stories.

Eerily familiar, in fact!

As you might imagine, while everyone is caught up in the current merger mania, there were a lot of previous hot-and-bothered moments now lost in the mists of time.

Did you know, for example, that AOL’s Ted Leonsis once made a $2 million bid for Yahoo (YHOO), early on? “Since there were two of them,” said Leonis to me once, referring to Yahoo Co-Founders Jerry Yang and David Filo, “I thought each should get $1 million.”

While that was kind of kooky, this excerpt from my second book on AOL, titled “There Must Be a Pony in Here Somewhere: The AOL-Time Warner Debacle and the Quest for the Digital Future,” was much more serious.

At the time, late in 1999, Time Warner’s former CEO Jerry Levin was locked in difficult negotiations with AOL’s CEO Steve Case. When they reached a standstill, AOL seriously pondered acquiring eBay, while Time Warner (TWX) went looking for a link-up with Yahoo:

Here’s the excerpt from a section in the fourth chapter:

IF YOU CAN’T BE WITH THE ONE YOU LOVE

AOL and Time Warner wasted no time in trying to find alternatives to each other, scouring for as big a blockbuster as they could find across the interactive landscape.

Both were serious, but each also needed a stalking horse that might shake the other up enough to get back to the bargaining table.

Time Warner quickly turned to Yahoo.

Levin had met and been deeply impressed with a very young Jerry Yang, one of the co-founders of Yahoo, the spectacularly successful Internet directory and portal.

With the biggest Web audience, Yahoo had become a powerhouse, and it had done so with little of the rough behavior AOL was so well known for.

Its valuation had headed skyward too, making Yang a multi-billionaire in his first job after leaving college.

Yahoo was also, unlike most Internet companies, admirably profitable.

I had called Yang as soon as I got to California in 1997.

Aside from Amazon’s Jeff Bezos, eBay’s Meg Whitman and Real Network’s Rob Glaser, Yang was the Web icon most central to the whole boom.

He was also a pretty nice person—well spoken, courteous and with a reputation for being very easy to deal with.

He wasn’t always, though, and I often found myself engaged in little debates with him on whatever trend was sweeping across the landscape.

We almost always disagreed, and he liked to make little digs: “Kara, The Wall Street Journal’s circulation hasn’t grown in, like, a million years.”

But his were the kind of low-level obnoxious comments you’d hear from a brother. I hate to admit it, mostly because he would mock me, but I liked him a lot.

So did Levin. So he sent [CFO Rich] Bressler to meet with Yang and the Yahoo leadership, which included CEO Tim Koogle and his No. 2, Jeff Mallett.

The two sides had several meetings in late November and early December, according to those familiar with the talks, about what the companies could do together and how both sides saw the world evolving.

But Bressler was coy, and if he had a bigger idea the Yahoo team was hard pressed to figure it out.

“He was not specific at all,” one Yahoo executive told me. “We huddled and asked ourselves, ‘Are they serious, or are they just fishing?’”

The Yahoo team was torn, since they too were worried about the valuations and wondered if they could survive without a big media partner.

They also wanted to stay independent if possible, and didn’t want to venture so quickly outside the company’s core competency or outside the Net.

Doing a deal, even if meant that Yahoo would grab a major stake, meant selling the company and ending their mission.

Unlike AOL executives, the Yahoo team thought they would surely get lost in the shuffle, and that they were ill-suited to try to run a complex media company.

They were also dubious that old and new media were really natural partners.

“We were less grand in our approach,” said another executive. “And we were a fast-growing company, so we weren’t so sure we wanted to go slower.”

Time Warner was also reticent, because of the high valuation and also because Yahoo didn’t have a huge base of paying subscribers like AOL.

Being totally ad-supported, Yahoo was a much riskier proposition for Time Warner.

And soon enough, Levin would be put off by the same whiff of arrogance from the Yahoos that he’d picked up from Case.

At a dinner with Yang and Mallett at the elegant Upper East Side French bistro Le Refuge in Manhattan, Levin started lecturing the pair on Yahoo’s inflated currency, asking how its business was sustainable.

Mallett, unfamiliar with the subtleties of the media world dance and frustrated by Levin’s cryptic nature, shot back quickly and arrogantly.

“Why are you peppering us about our business when you’re the ones without any growth?” he snapped, then uttered the most annoying Web mantra of the era: “You just don’t get it.”

The remark, more confrontational than it needed to be, made Levin cringe. A few more meetings did take place, but the Yahoo option was pretty much off the table.

Imagine There's a MicroHoo (It's Easy if You Try)

Kara Swisher — Fri, 14 Mar 2008 19:06:33 +0000

OK, we Photoshopped it, but only because we could not get our head around what the official Yahoo/Microsoft post-merger picture might look like.

With news that the pair were in informal talks, first broken by CNET, Boomtown still could not conceive of Yahoo (YHOO) CEO and Co-Founder Jerry Yang trading high-fives with Microsoft (MSFT) CEO Steve Ballmer, given Yang has thus far behaved as if the unsolicited bid from the software giant was akin to eating a bowl of worms.

But, in the words of the immortal John Lennon, “Imagine all the people/Living life in peace.” Thus we took that famous picture of AOL’s Steve Case and Time Warner’s (TWX) Jerry Levin (they seemed so happy at the time–who knew?) at the dawn of that dog of a merger and went to town.

BoomTown has always been an avid student of those always curious post-acquisition/merger shots that get taken as the first public visual expression of a deal.

For example, the genuine one, pictured below, of the Bebo/AOL union announced yesterday, with Bebo president Joanna Shields shaking hands with AOL CEO Randy Falco, while AOL President Ron Grant stands nearby, seems unusually awkward and uncomfortable to me, for example.

Is a picture worth a thousand words or are looks deceiving? You decide.