After officially announcing that AOL was going to be spun off yesterday, Tim Armstrong, the CEO of the Time (TWX) Warner online unit, held an all-hands meeting for employees today.

BoomTown reported the details of the new structure of AOL yesterday, which Armstrong discussed at the gathering.

Here is a quick synopsis of the meeting, which included a focus on content, advertising and making AOL’s acquisitions work better via a new venture unit.

Several employees I spoke to said Armstrong–who was a former top Google (GOOG) advertising exec, which–not surprisingly–seems to be a strong influence on him–did a good job.

Staffers said they were glad for the vision that Armstrong displayed, which some at the company think has been lacking in recent years.

Here’s a rundown of several key points:

The Google-ization of advertising: AOL’s Platform-A, including its valuable Advertising.com unit, will focus on many more customers, rather than a few big ones.

That includes having more of a self-service model, more like Google.

Content is king: Armstrong stressed content, which comes from AOL’s MediaGlow content unit, run by Bill Wilson.

Content will be a key focus at AOL, which has been investing heavily in media sites over the last several years.

Sink-or-swim start-ups: AOL’s acquisitions–such as the overpriced Bebo social networking unit–have to live and die on their own in a new AOL Ventures Group.

Some will be spun out and some will be sold, but all have to survive by their wits.

Internet company values: Compensation, which has been hindered by Time Warner’s ownership, will be based on how Web companies compensate.

That means stock options and equity, but also more risk and innovation on the part of employees.

While there were reports that the Time Warner board was meeting today to approve the spinoff of its AOL online unit, it actually gave the move an “enthusiastic endorsement” last night, according to sources.

Time Warner (TWX) just put out the press release about the move this morning, which has been long expected since former top Google (GOOG) advertising exec Tim Armstrong was named CEO of the long troubled AOL.

“Following the proposed transaction, AOL would be an independent, publicly traded company,” said the release, which gave few details of the shape of the new company.

But, several sources with knowledge of the situation said Armstrong is set to make massive changes to the structure of AOL, sweeping aside its current set-up almost completely.

That includes keeping the access business, which many thought would be sold off, and putting many of the companies it has recently acquired–including its pricey Bebo social networking site–in a separate ventures unit, which will try to attract outside investment.

The strategy will focus AOL on several key areas, including media, “scaled” advertising and communications.

Time Warner owns 95 percent of AOL, and Google holds the remaining five percent, but Time Warner said it would buy back that stake in the third quarter of 2009 as part of the transaction.

“Accordingly, once the proposed separation is completed, Time Warner shareholders will own all of the outstanding interests in AOL,” said the release. “The proposed transaction will be structured as tax-free to Time Warner stockholders.”

Armstrong is at the midpoint of a 100-day review of AOL, which has seen its profits and revenues drop in recent years.

That has meant a hard look at the structure put in place by his predecessors, former CEO Randy Falco and President Ron Grant.

They had cleaved AOL into three parts: the MediaGlow content studio; People Networks, which includes Bebo, as well as AOL’s communications assets like AIM instant-messengering service; and its Platform-A advertising unit.

Each has had its own president, and has been operated more independently.

That is effectively over, said sources, as had been signaled by the recent departures of People Networks head Joanna Shields and Platform-A head Greg Coleman.

Now Bebo, as well as start-ups AOL has bought recently such as the Userplane social-media apps unit and its Truveo video search service, will be “relocated” into AOL Ventures.

Each will operate on its own, and AOL will try to get venture capitalists to invest in them.

Armstrong has also decided to stress the AOL brand again, after years of creating a variety of new ones, and try to revive its other well-known brands, such as AIM and ICQ.

All the other parts of AOL will be integrated more tightly together, although the MediaGlow content business will get additional investment and still be run by Bill Wilson.

In addition, sources said it was unlikely AOL would make any big acquisitions after it spins out. Instead, it will focus on making key partnerships with a variety of companies.

Here’s the official press release:

Time Warner Inc. Announces Plan to Separate AOL
May 28, 2009

NEW YORK – Time Warner Inc. (NYSE:TWX) today announced that its Board of Directors has authorized management to proceed with plans for the complete legal and structural separation of AOL from Time Warner. Following the proposed transaction, AOL would be an independent, publicly traded company.

Time Warner Chairman and Chief Executive Officer Jeff Bewkes said: “We believe that a separation will be the best outcome for both Time Warner and AOL. The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses. The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”

After the proposed separation is complete, AOL will compete as a standalone company–focused on growing its Web brands and services, which currently reach more than 107 million domestic unique visitors a month, as well as its advertising business, which operates the leading online display network that reaches more than 91% of the domestic online audience. AOL will also continue to operate one of the largest Internet access subscription services in the U.S.

AOL Chairman and Chief Executive Officer Tim Armstrong said: “This will be a great opportunity for AOL, our employees and our partners. Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options. We play in a very competitive landscape and will be using our new status to retain and attract top talent. Although we have a tremendous amount of work to do, we have a global brand, a committed team of people, and a passion for the future of the Web.”

Today, Time Warner owns 95% of AOL, and Google holds the remaining 5%. As part of a prior arrangement, Time Warner expects to purchase Google’s 5% stake in AOL in the third quarter of 2009. After repurchasing this stake, Time Warner will own 100% of AOL. Accordingly, once the proposed separation is completed, Time Warner shareholders will own all of the outstanding interests in AOL.

The proposed transaction will be structured as tax-free to Time Warner stockholders. The transaction is contingent on the satisfaction of a number of conditions, including completion of the review process by the Securities and Exchange Commission of required filings under applicable securities regulations and the final approval of transaction terms by Time Warner’s Board of Directors. Time Warner aims to complete the proposed transaction around the end of the year.

[UPDATE: AOL confirmed our story below about Coleman's departure and Levick's appointment. See below.]

Platform-A President Greg Coleman–the former Yahoo advertising sales exec who came to AOL only three months ago–is leaving the company, sources said, as new CEO Tim Armstrong remakes his top staff in preparation to spin off the Time Warner (TWX) online unit.

Coleman was brought to AOL by former CEO Randy Falco in February, replacing Lynda Clarizio. But Falco was ousted two weeks after Coleman got there.

Armstrong, sources said, announced the moves to staff tonight, right after he told Coleman about his decision late today.

Coleman will be replaced by a Google ad exec, Jeff Levick, sources said, who had a close relationship with Armstrong when they were both working at Google (GOOG).

AOL said in a press release that Levick would become “President, Global Advertising and Strategy, a new and expanded role, in which he would be “responsible for Platform-A, AOL’s advertising business, as well as developing global revenue strategies.”

Levick will be the third major Google advertising exec to leave the company recently, after Armstrong himself and today’s departure of former DoubleClick boss David Rosenblatt.

Levick (pictured here) was a VP of industry development & marketing, the Americas. He has been at Google since 2001.

Also out: CFO Nisha Kumar, who came to AOL in early 2007 from Time Warner. She was told of the decision earlier, and there has been a search on for her replacement.

It is a time of much change at AOL. Yesterday, Time Warner reiterated its intent to spin off AOL in a regulatory filing, and to buy back the five percent stake Google owns.

Time Warner also had to deliver bad news about AOL’s disappearing ad revenue today in its quarterly earnings report. It was down 20 percent.

Its ad business has not been helped by the fact that AOL has seen a number of Platform-A heads roll over the last two years.

Coleman is an experienced online ad exec, who was at Yahoo (YHOO) for seven years, responsible for all advertising revenue worldwide. He came to Yahoo from Reader’s Digest.

But Coleman ran into Yahoo’s management buzzsaw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

But Yahoo’s ad business did grow strongly under him and former Yahoo ad exec Wenda Millard. She was also pushed out of Yahoo and just left her job as co-CEO of Martha Stewart Living Omnimedia.

Before AOL, Coleman had been running a Los Angeles-based start-up called NetSeer, which focuses on ad targeting.

While at AOL a short time, Coleman had busied himself reshuffling the staff there in several moves.

He has a three-year contract, sources said, which AOL will presumably have to pay out on.

Here is the official AOL press release:

JEFF LEVICK NAMED HEAD OF AOL GLOBAL ADVERTISING AND STRATEGY

New York, NY–April 30, 2009–AOL announced that Jeff Levick will join the company as President, Global Advertising and Strategy. In this new and expanded role, Levick will be responsible for Platform-A, AOL’s advertising business, as well as developing global revenue strategies. Levick comes to AOL from Google, where he was most recently VP of Industry Development and Marketing, The Americas. He will report directly to AOL Chairman and CEO Tim Armstrong.

“Our goal at AOL is to create great content and products, as well as make our advertising offerings the best in the industry for marketers and we are putting together the strategy to achieve that. I’m delighted that Jeff will be coming on board to lead this effort,” Armstrong said. “I’ve worked with Jeff for more than seven years at Google, and he is absolutely the right person to drive growth in our premium ad sales, dramatically scale our Advertising.com business, and further develop AOL’s research initiatives and consumer insights.”

“This is a perfect time to join AOL and I firmly believe that AOL’s best days are ahead of it,” said Levick. “The company has one of the largest and most engaged audiences on the Web, some of the best advertising technology in the business, and a powerful third-party network. There is great opportunity here for us to capture.”

As a result of this change, Greg Coleman will be leaving Platform-A, where he has served as President since early February 2009.

“In only a short time, Greg made a strong imprint on Platform-A’s sales organization–reorganizing and refocusing the team,” said Armstrong. “I appreciate his efforts and know that they will contribute to the work that lies ahead with Platform-A.”

Levick will officially join AOL in the coming weeks. At Google, Levick was responsible for business marketing activities for the Americas as well as sales development and strategy for all of the vertical industries covered by Google’s Americas sales organization. Levick joined Google in 2001 and has held various executive management positions in the company’s advertising sales organization in both North America and Europe.

Prior to joining Google, Levick served as a corporate attorney with a specialty in mergers and acquisitions at the international law firm of Katten Muchin Rosenman, and held roles at various online ventures in Chicago. He currently serves on the board of directors of Helium.com, the advisory board of the College of Communications at DePaul University and as an advisory board member of the global trade organization Search Engine Strategies (SES). Levick holds a J.D. from DePaul University and a bachelor’s degree from New York University, where he graduated cum laude.

More moving of the chairs at AOL’s Platform-A.

The Time Warner (TWX) online unit will announce today that Mark Ellis has been promoted to EVP of sales at the advertising division.

He will lead Platform-A’s digital ad sales, sources said, including premium efforts at AOL’s MediaGlow content unit and for its third-party ad network.

It is all part of extensive management reorganization being done by Platform-A President Greg Coleman, former sales head at Yahoo (YHOO).

New CEO and Chairman Tim Armstrong started yesterday and told staff in a memo that even more change was coming, as part of a 100-day effort to evaluate how to revive the online company.

Ellis has been at AOL for a while, most recently as SVP of vertical and product sales. Previously, he worked at sports marketing company IMG, at Quokka Sports, a sports Web site and at Time Inc. as publisher of Time Inc. New Media.

The undoing of previous management of AOL continues at the Time Warner (TWX) online unit with even more reorganization of its Platform-A advertising unit.

Sources said the changes are part of a simplifying of the division, one of three at AOL (the others are communications and content).

Platform-A head Greg Coleman, who used to run ad sales at Yahoo (YHOO) and should know from reorgs, had already done some rejiggering in late February after he arrived.

Coleman–who was hired by former CEO Randy Falco, but will be staying anyway under new head Tim Armstrong–penned a memo about the changes, which went out to staff this morning and is below in its entirety.

Headline: Execs moving in and out of musical chairs and fewer cooks in the kitchen, or “more people on the street selling.”

Here’s the entire memo, after the jump:

To: Platform-A US employees

From: Greg Coleman

Subject line: Organizational announcement

Dear Platform-A colleagues,

At our last All Hands meeting we discussed the need to move quickly to position Platform-A to grow revenues and gain share in today’s tough market. We talked about how we are putting together a plan of action that we can implement quickly, and how we need to move aggressively to better align our sales force, and get more people on the street selling.

Today, we’re announcing the first steps we’re taking to implement this plan.

First, I’m pleased to announce that we’ve named Chris Maccaro VP New York, where he will lead an expanded regional sales team in our largest market. Chris has worked in a variety of roles in his six years at AOL, most recently as VP Property Sales. Prior to that, he was a Regional Sales Director in New York. Chris will be announcing his leadership team and sales structure over the next few weeks. The New York, Boston and Mid-Atlantic offices will report into Mark Ellis on an interim basis. Also, our Toronto office will now report into Rick Simmons and become part of the Midwest Region.

As a part of this realignment, Brent Spitzer will be leaving the company. Brent has made many tremendous contributions to our organization over the past nine years. Please join me in thanking him for everything he’s done for Platform-A and wishing him all the best on his next endeavor.

Next, we will be disbanding of the Property and Category sales teams and realigning many of the talented individuals from those teams into regional sales and other parts of the organization. Both teams were instrumental in providing vertical focus and sales pressure over the past year, but there is a more urgent need now to drive direct advertiser demand and relationships. Our Homepage and Multicultural teams will remain intact and will report to Ron Bernstein.

The Product Sales team will continue to report to Julie Greenhouse but will move under Don Kennedy, as will Ben Trenda who runs Agency Partnerships and Global Alliances. Don will also create a small team of sales specialists who will focus exclusively on driving network revenue through the regional sales teams. Don will be working to build his team and will announce details of his organization in the next few weeks.

We all recognize the need to drive world class customer solutions more effectively and efficiently. To that end, we are creating a new Marketing Solutions organization, which will combine the current Strategy, Marketing and Property Sales Development teams. This new organization will focus on the needs of sales and the customer, and will harness the assets of MediaGlow, the Advertising.com network and our other best-of-breed products. We’re beginning a search for a strong leader to run the Marketing Solutions organization. We are also beginning a search for a highly credentialed Research Director to support sales. In the interim, Doug Boccia, Aleck Schleider and Blake Pierson will report to Mark Ellis. Anne Hunter and her ADlytics team will now report into Peter Ban and the Business Intelligence organization.

We are not planning any near-term structural changes in our Account Management organization. This team is critical to our success in scaling revenue, and it has risen to the occasion throughout the integration of Platform-A and our migration to ADTECH.

I realize that these are widespread changes, but they are necessary for us to succeed. There will be a transition period of several weeks where we will provide more structural clarity and displaced individuals will be able to interview for open positions.

I can’t tell you how encouraged and excited I am about the progress we are making and what we’re going to accomplish at Platform-A. These changes are the first steps in moving forward to build a world-class sales organization.

Greg

For a tall man, Tim Armstrong has been on an awful lot of online companies’ short lists.

For a big Web exec job, that is. Indeed, whenever one opens up in the Internet space, the 6-foot 3-inch Google ad sales exec always pops up on it as a possible candidate to lead a variety of digital companies and start-ups.

Finally today–after longtime speculation that Armstrong had long wanted and would eventually leave his post at Google (GOOG) in order to try his hand at being top dog–he took over as chairman and CEO of the once-mighty, but now-not-so-much, AOL.

Armstrong, 38, will start at AOL on April 7.

“For me, it is a great opportunity to go to what I consider a top-five Internet brand,” said Armstrong, in an interview with BoomTown this afternoon, with a whole lot of the diplomacy and nice-guyness he is well known for at Google and in the online advertising industry. “I am looking forward to taking what I have learned at Google and seeing what I can bring to really help AOL.”

Noting that for all its decline–pointed out by me–AOL was still one of the few “global Internet brands,” Armstrong said he thought there was still a lot of juice in the consumer appeal of AOL.

So much so, he added, that AOL owner Time Warner (TWX) has given him a lot of options for its future, from keeping it inside the larger media conglomerate (unlikely) to partnering with another company (less unlikely) to spinning it out (likely!).

“One of the things we discussed was making sure we were able to have the best outcome for AOL,” said Armstrong. “That could take the form of a lot of different paths.”

(Translation: As soon as the economy brightens, I am going to become a public company CEO, just like my soon-to-be-ex-boss Eric Schmidt!)

The move to put Armstrong in at AOL was sudden and swift, and also more than a little cutthroat on the part of his new employer, which bounced current Chairman and CEO Randy Falco and President and COO Ron Grant without a lot of warning to them or any top exec at AOL.

While there has been much talk about when Time Warner would become weary of the pair’s management of AOL–which has been rocky (most especially their overpaying for the Bebo social-networking site, which others at Time Warner never got over)–their defenestration and Armstrong’s installation happened rather quickly.

And, indeed, Armstrong confirmed that the talks to take over at AOL had only started a few weeks ago, increasing in “intensity over the last week.”

So intense, for example, that Grant only found out he was being replaced this afternoon after a personal visit from Time Warner CEO Jeff Bewkes, who made a rare appearance at AOL’s downtown Manhattan HQ to deliver the bad news.

(One AOLer’s funny, but entirely imaginary, vision: Bewkes signed up Armstrong, whose Google office is right nearby AOL in New York, and then hightailed it over to AOL to drop the hammer before the ink was dry on the contract.)

Via a coup or not, nabbing Armstrong is indeed a coup–at least from a shiny resume point of view–for Bewkes, who has been struggling with what to do with AOL for a while.

While he often affably jokes about its many problems–from declining ad sales to management turmoil to, it must be said, increasing irrelevance–Bewkes has been trying to sell off AOL or turn the asset into something more valuable for far too long.

Bewkes knows Armstrong well, as Google is a major partner of AOL in search advertising, and Google also owns five percent of AOL, in a deal in which Armstrong was involved (and whose value the search giant recently marked down).

Armstrong said he was also close to Time Warner General Counsel Paul Cappuccio.

“It was a natural fit with AOL, since I know the company so well,” Armstrong said, adding he would spend his first weeks getting to know AOL’s employees and its products better, before making more concrete strategic decisions or changing any course setting of Falco’s.

Under Falco’s plan, AOL was focusing on a three-pronged strategy: social networking and communications (People Networks), content (MediaGlow) and advertising (Platform-A).

“In general, I do want to spend time with the staff,” he said. “Some of the stuff I have seen so far has actually paid off…and a lot of the new products show a lot of passion.”

Whether he can turn passion into blockbuster products is another story, and some are worried that Armstrong’s experience is too heavily weighted in ad sales rather than in development of killer services, which is what AOL might need to recover.

But Armstrong said he had a lot of other operational duties at that search giant, noting that “Google is a very complex business.”

And both current and former AOLers hope his ad experience will allow AOL to return to its strong premium advertising roots that were less focused on of late. In fact, Falco recently hired former Yahoo (YHOO) sales head Greg Coleman to do just that.

And Armstrong has a lot of support from unusual sectors too. Wrote former AOL head Jon Miller, who was, ironically, forced out by Bewkes in favor of Falco and Grant, to me in an unsolicited email: “Count me amongst the Armstrong fan club.”

And, many staff at AOL I spoke to today–whose morale has been buffeted by layoffs and ongoing bad news–seem genuinely thrilled to score such a prominent exec.

“I am so thrilled. We couldn’t change the DNA with Rondy on top,” said one exec, referring to the derisive nickname that Falco and Grant had within AOL, which combined their two first names. “I feel really positive.”

So does Armstrong. “I am really looking forward to running AOL,” he said.

And personally, as a longtime and clearly obsessive watcher of AOL, I am looking forward to seeing him try.

Let’s just say the firing of AOL CEO Randy Falco and President Ron Grant was not exactly expected–even if everyone thought it should happen–within the high ranks of the troubled online unit, until Time Warner (TWX) CEO Jeff Bewkes dropped the guillotine this afternoon in Manhattan.

And drop it he did, quickly lopping off the pair of executives Bewkes had installed himself. He replaced them with Tim Armstrong, Google’s head of advertising sales, a man with a much brighter resume, for what is likely to be an attempt to spin out AOL now that merger options are moribund.

“It’s a shock to everyone how sudden it was,” said one exec. “Everyone talked about when Bewkes was going to run out of patience with Randy and Ron all the time, but no one knew it was coming now, since it had taken so long.”

Grant, for example, only found out about the situation when Bewkes told him in person earlier today at AOL’s offices in lower Manhattan, said several sources. Bewkes has hardly ever been there–he has a stunning office at the Time Warner Center in midtown–although Armstrong’s office at Google is nearby.

Falco might have learned about the situation earlier, but several sources said no other top exec at AOL did until about 30 minutes ago.

The whole coup came, said several sources, from corporate, which swooped and made the moves swiftly, very quickly after signing the deal with Armstrong.

(Here is an interview I did this afternoon with Armstrong after the appointment was announced.)

AOL PR did not seem to be aware of the move until this afternoon, and neither did its three top division heads: People Networks head Joanna Shields, MediaGlow President Bill Wilson or newly hired Platform-A ad leader Greg Coleman.

Yesterday, quite by coincidence, BoomTown wrote about the continued turmoil within AOL and the unhappiness with Falco, which was long-running:

“That’s caused a lot of people inside AOL and also a wider circle at Time Warner to increasingly point the finger of blame at AOL CEO Randy Falco, wondering if and when he will suffer too.

“‘Why Randy Falco gets to keep his job is a mystery to a lot of people,’ said one top exec at another division.”

Well, it is a mystery no longer, apparently, with Bewkes putting the high-profile Armstrong in place as AOL’s CEO and chairman, although he has been casting about for new leadership for a while, according to many sources, such as former Yahoo COO Dan Rosensweig.

AOL is in the midst of laying off 10 percent of its staff of 7,000, although many feel deeper cuts are needed, especially since Bewkes has been unable to complete a deal to sell it after a lot of trying.

Interest by Yahoo (YHOO) in merging with AOL, for example, has cooled and there seem to be no true suitors on the horizon. A spinoff of the division seems to be the most likely option.

Whether that includes a strategy reset for AOL or not is unclear.

Under Falco and Grant–who were derisively given the nickname Smithers and Burns from “The Simpsons,” and also “Rondy” by some inside the division who did not like them–AOL paid $850 million for the Bebo social-networking site last year, an overpriced move that has grated on many throughout Time Warner.

Under their plan, AOL was focusing on a three-pronged strategy: social networking and communications (People Networks), content (MediaGlow) and advertising (Platform-A).

But new Platform-A head (and former Yahoo sales exec) Coleman–whose business has to drive revenue growth–cannot perform miracles in such a weak environment no matter what cool new products and offerings either People Networks head Shields or MediaGlow president Wilson create.

Armstrong certainly knows sales, as head of sales efforts at Google (GOOG), although he has never operated a business as multi-faceted as AOL, which–despite its troubles–remains huge.

More to come soon…

Earlier today, Silicon Alley Insider reported that layoffs at AOL, which had been announced in January, were finally taking place.

Actually, said an AOL insider, about 10 percent of the layoffs, or 70 people, have been let go since the announcement. The pace just got ratcheted up today, adding another 300 to the pyre at the troubled Time Warner (TWX) online division.

But, said several sources, the slashing of staff might go well beyond what has been announced, as AOL continues to drill down on its three-pronged strategy: social networking and communications (People Networks), content (MediaGlow) and advertising (Platform-A).

That’s no surprise since AOL’s options have landed, to say the least, in that dreaded rock-and-hard place.

The interest by Yahoo (YHOO) in merging with AOL, for example, has waxed and waned–it’s waned right now, sources said, though not completely–and there seem to be no true suitors on the horizon.

And new Platform-A head (and former Yahoo sales exec) Greg Coleman–whose business has to drive revenue growth–cannot perform miracles in such a weak environment, no matter what cool new products and offerings either People Networks head Joanna Shields or MediaGlow President Bill Wilson create.

Thus, with the ever-weakening economy, there is still fat to be cut out, especially since Time Warner CEO Jeff Bewkes either has to sell AOL off or make it work a whole lot better.

And working better likely means more cuts–and a whole lot more of them.

That’s caused a lot of people inside AOL and also a wider circle at Time Warner to increasingly point the finger of blame at AOL CEO Randy Falco, wondering if and when he will suffer too.

“Why Randy Falco gets to keep his job is a mystery to a lot of people,” said one top exec at another division.

While one might look at, say, the media giant’s magazine division and ask the same of its head, Ann Moore, the more obvious answer is that times are tough all over and not just at Time Warner.

Said an AOL insider who does not like Falco’s leadership, but was sympathetic: “He probably should have pushed to sell it off more when times were better, but that was being run by corporate, so now he just has to deal with a weak economy and an online property whose value has been declining for a long time.”

In any case, for now, there’s no joy in Mudville. When the domestic layoffs are done by the end of this month, a source said, the company will turn to international firings (it’s harder to dump folks in Europe, apparently).

But, as another baseball maxim goes: At least when it comes to cuts at AOL, it’s never over until it’s over.

Another Web company, another management restructuring!

Yahoo (YHOO) reorg fever struck AOL today too, as its advertising head, Greg Coleman (pictured here), moved the exec chairs around his domain at AOL’s Platform-A unit.

Coleman–who actually once was Yahoo’s sales head before taking the new gig at the Time Warner (TWX) online unit earlier this month–is replacing some execs and elevating others. Also there is some sleepy ad-serving stuff about the migration to its ADTECH system.

In related news earlier today, BoomTown reported that AOL International head Maneesh Dhir was leaving.

You must all know the drill by now, after endless reorg memos today, so here’s the entire skinny in the memo Coleman sent out (also, after the jump, is the 2009 goals memo sent today by AOL CEO Randy Falco that says, let’s be honest, next to nothing):

From: Coleman, Greg
Sent: Thu 2/26/2009 7:00 PM
To: Platform-A@platform-a.com
Subject: Unlocking Our Potential

Dear Platform-A colleagues,

When I met with you earlier this month, we talked about the big mission we’re embarking on and the vision I have for our future.

Over the past year, you’ve done great work integrating Platform-A and creating a powerful business from the ground up. Platform-A now provides marketers the most comprehensive and cost-efficient tools and technologies for the digital advertising space.

Just today, we took another big step forward with the migration of our ad inventory to ADTECH–an incredible challenge and a big win for us and our advertising partners. My thanks go out to the technologies and ADTECH teams who made this happen.

I’ve also been inspired by what I’ve heard from people throughout the organization, many of whom reached out to me during my first few weeks here to express their confidence in our ability to succeed.

Now, after a year of transition, key acquisitions and integration, we need to turn our attention to unlocking the full potential of this great business. And we need to move aggressively.

This will mean changes in how we’re organized, particularly in our ad sales functions. Over the next few weeks, I will be rolling out a multi-tiered plan that will address our infrastructure, make necessary role changes and bring in talent where needed. I want to tell you about some initial steps we’re taking today.

First, Don Kennedy will be stepping down as head of ad sales, a role I will assume on an interim basis. Don and I agreed that his many talents are best served in a different capacity, and I look forward to working with him in the coming weeks to define that role.

In addition, Mike Peralta will be leaving Platform-A. I want to thank Mike for his contributions to the business, and wish him well on his future endeavors. His team will report temporarily to Mark Ellis.

In addition to his day-to-day responsibilities, Mark will also be working closely with me as an advisor as we work through the changes ahead. Mark is a veteran in the Internet advertising space, and in the short time I’ve been here, I’ve quickly come to value Mark’s insights into the market and Platform-A. I’ve asked Don to lend his keen insights as an advisor during this process as well.

We will also be holding two days of meetings next Tuesday and Wednesday with regional ad sales executives to discuss the plan and get their input.

As we think about our growth and our future, please know that our mandate is clear. Even in this economy, we must ensure we have the best sales teams and the best tools across the country to serve our clients and grow our share of the market.

I came to Platform-A because I know this business has an incredibly bright future. And I know that working together, and working closely with our colleagues in MediaGlow and People Networks, we will realize that future.

Greg

AOL’s 2009 Goals

Dear AOL colleague,

This year marks the third of our three-year turnaround plan for AOL. Over the past two years, we’ve transformed the company and focused on three key growth businesses–MediaGlow, Platform-A and People Networks–positioning AOL to succeed over the long term.

Last year, we saw progress in each of these businesses. MediaGlow experienced sustained and healthy increases in users and engagement, proving we can grow our Web audience by creating experiences that appeal to people’s passions. Our People Networks unit embarked on a series of innovations and integrations that will set our social media experiences apart from the competition. On the advertising front, we integrated our acquisitions and made progress in other areas, although we continue to face challenges in premium display ad sales, which we are aggressively addressing.

If 2008 was about aligning our company against our core businesses, this year is about executing on our goals in what’s sure to continue to be a difficult market.

To succeed, we’ll need to continue operating as efficiently as possible, taking advantage of every available opportunity and remaining focused in a noisy marketplace. Our 2009 goals are designed to provide that focus. The goals may look familiar to you, which is a testament to the fact that our strategy over the past two years is the right one. As before, each of these goals will have specific metrics attached to them, which your business leaders and managers will be communicating in the near future.

Publishing. Over the past 18 months, we’ve reinvented our approach to programming, and as a result we’re successfully and efficiently reaching a younger and more valuable audience. This year, our new MediaGlow business unit will build on this momentum, launching 30 new edited niche sites and thousands of automatically programmed sites, creating original programming in our Los Angeles and New York studios and growing our audience worldwide, while continuing to enhance our ability to monetize our programming.

Advertising. Platform-A today offers advertisers easy access to the largest reach and the most sophisticated set of advertising tools available online, thanks to the integration last year of our seven advertising acquisitions. This year, we will build on Platform-A’s unmatched strengths to help marketers fully harness digital media to build brands and enhance online performance, worldwide.

Social Media. People Networks’ mission is to connect people with everyone and everything they care about. Last year, the group focused on integrating Bebo, AIM, ICQ, Goowy, Yedda, SocialThing!, Userplane and our other community properties, which combined reach more than 90 million worldwide. This year it will launch a series of innovations that leverage the strengths of this integration, starting this month with breakthrough updates to Bebo, and proceeding to a program to socialize the Web, updates to AIM and much more. In 2009, People Networks will create the most engaging and useful social media services available with the goal of making it simple for consumers to live their lives online.

Products & Technologies. In 2008, the Platforms team grew the Search business worldwide by more than 7% year over year and the MapQuest and Commerce & Marketplace teams showed strong profitability and feature innovation. At the same time, the global publishing and Relegence teams helped build out the systems that would become MediaGlow. The Products team focused its efforts on core products–Mail, Mobile, Desktop and Toolbars–that offered us the best opportunities for growth, while exiting dozens of underperforming ones. This year, the combined Platforms and Products teams will continue to innovate on these core products and services. The Technologies team will continue to improve our ability to launch and scale new sites and manage our data centers and network as efficiently as possible.

Access. Over the past two years, the Access team has done a remarkable job of managing this business, expanding margins, improving our ability to convert subscribers to free users and cutting costs, while maintaining the quality of the service. Access continues to be an important source of revenues and profit for the company, and this year, the team will continue to deliver in these areas.

Cost Management. Our efforts to effectively manage costs across the board have been a significant success, positioning AOL for the troubling economic times we currently face. In 2009, we will continue to look for ways to prudently manage our business and align costs with our ad-supported business. This isn’t just about cutting costs, it’s about smart resource allocation.

Living Our Values. Achieving our goals will mean nothing if we lose site of our company’s values. Living our values – integrity, collaboration, inclusiveness, outward focus, innovation – is a prerequisite to hitting our numbers. In 2009, we will continue to embody all of our company’s values and behaviors in everything we do.

You know as well as I do that this year will present us with new trials, new surprises and new opportunities. I’m confident that by working together, guided by these goals and our shared values, we’ll achieve much in 2009.

Thanks for everything you do every day to make AOL great.

Randy

As BoomTown reported earlier today, I just got sent the entire internal email–penned and just sent out by AOL CEO Randy Falco–about the replacement of its Platform-A President, Lynda Clarizio, with former Yahoo top ad sales exec Greg Coleman.

AOL also just put out a press release confirming the move.

As new head of the Time Warner (TWX) online service’s ad unit, Coleman has his work cut out for him, turning around a business that has been hit by a severe fall-off of revenue.

“No doubt Greg is joining Platform-A at a difficult time,” writes Falco below. “The deepening economic recession is affecting every corner of the economy, including our own.”

Translation: Yahoo (YHOO) was kindergarten! Get to work pronto, Greg!

Here’s the full memo:

Dear AOL colleague,

Today we are announcing a change in the leadership of Platform-A that will help us build on the unmatched reach of our advertising business and fully leverage the success of our MediaGlow and People Networks businesses.

Greg Coleman, a seasoned advertising sales and publishing executive and former EVP of global sales at Yahoo, has agreed to join us as President of Platform-A, replacing Lynda Clarizio.

Under Lynda’s leadership, we made great progress at Platform-A–consolidating and integrating seven companies; creating a unified organization around sales, technology, operations & product management, technology sales, publisher services, R&D, international, marketing, strategic planning and network development; and expanding overseas. As a result of Lynda’s success in integrating the business, Platform-A today has the largest reach and most advanced suite of digital advertising technologies available anywhere. We all owe Lynda a debt of gratitude for her outstanding contributions to Platform-A.

Now, we have the opportunity to build on this foundation and expand premium branded display sales across our extensive and fast-growing MediaGlow programming network. And Greg, who has 25 years of media sales and publishing experience, is ideally suited to lead this effort.

During his nearly seven years at Yahoo, Greg led the company’s search and display ad sales teams. During that time, Yahoo’s ad revenues climbed tenfold–reaching more than $6 billion–with substantial ad growth in the U.S. as well as Europe, Asia and key emerging markets. For the past year, Greg has been CEO of NetSeer, a start-up focused on next generation search and ad targeting.

Greg understands that online brand building is the next frontier in digital advertising, and whoever can deliver marketers measurably improved branding online will be poised to lead over the long term. His great agency and C-level relationships will help us create breakthrough branding packages that leverage the strong success of MediaGlow and the upcoming developments at Bebo.

No doubt Greg is joining Platform-A at a difficult time. The deepening economic recession is affecting every corner of the economy, including our own. Yet, even in this volatile environment, online advertising remains the most productive, efficient and measurable way for advertisers to reach audiences that are dispersing across an increasingly fragmented media landscape. I’m confident that Greg has the background and expertise to deliver on the promise of Platform-A.

Please join me in welcoming Greg to the AOL family, and in thanking Lynda for her many contributions to Platform-A and wishing her all the best on her future endeavors.

Randy

The game of executive musical chairs among Web companies keeps on going, with sources telling BoomTown that AOL ad head Lynda Clarizio will be departing the online service and replaced by former high-ranking Yahoo ad exec Greg Coleman (pictured here).

Last week, this column first reported on former Yahoo media head Scott Moore taking a similar content job at Microsoft (MSFT), which had been vacated by Jeff Dossett, who took Moore’s job at Yahoo.

The less confusing move at AOL, with Coleman taking over for Clarizio and which has been in the works for only a week, could be announced as early as today, although I have been hearing rumors of such a development since late last week.

Clarizio has been head of Platform-A, the overall name for AOL’s advertising business, which includes a lot of various online ad companies AOL has bought in recent years.

She had been running AOL’s Advertising.com in Baltimore before being tapped to integrate them better over the last year, after a series of ad execs shuffled in and out of AOL.

But, said several sources, as a former AOL lawyer and dealmaker, Clarizio (pictured here) is not regarded by top execs the kind of nitty-gritty sales exec that AOL needs now, as it seeks to revive its fortunes.

AOL’s ad business has lagged badly of late, with owner Time Warner (TWX) pre-announcing that the online service’s results would be particularly weak this quarter. Time Warner reports quarterly earnings tomorrow.

Since a much-chewed-over possible merger with Yahoo (YHOO) has been put on ice, with the recent arrival of new CEO Carol Bartz, Time Warner and AOL execs have decided to focus on strengthening the online service and making much needed changes.

AOL recently announced a 10 percent layoff of its staff of 7,000, part of the rightsizing that has been going on.

And its valuation was also recently written down by Google (GOOG), to $5.5 billion from $20 billion several years ago.

AOL had already been in the midst of renovating its communications and social-networking assets under a new division called People Networks, which is run by former Bebo head Joanna Shields.

Its content arm has also gotten a different blog-centered direction and name–MediaGlow–under Bill Wilson.

Now, it’s apparently time for the ad leg of AOL’s three-pronged new strategy its future business is resting on to be fixed.

The hiring of Coleman came suddenly, said several sources. He had been considering a top job at another well-known online company and also was planning to move to a start-up he has been running to the Silicon Valley area.

He was hired by AOL CEO Randy Falco, whom Coleman has known for a long time, only last week, after Falco heard that Coleman was considering other positions.

Sources at Yahoo said the hiring had to be cleared by the company and Bartz, at Time Warner CEO Jeff Bewkes’s request, due to competitive issues.

Coleman is indeed an experienced online ad exec, who was at Yahoo for seven years, responsible for all advertising revenues worldwide. He came to Yahoo from Reader’s Digest.

But Coleman ran into Yahoo’s management buzzsaw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

But Yahoo’s ad business did grow strongly under him and former Yahoo ad exec Wenda Millard. She was also pushed out of Yahoo and now is Co-CEO of Martha Stewart Living Omnimedia.

Since then, Coleman has been running a Los Angeles-based start-up called NetSeer, which focuses on ad targeting.

Given his media background, Coleman is likely to be key to expanding premium branded advertising display sales across AOL’s advertising and programming networks.

He will move to New York and report to AOL President and COO Ron Grant, said sources, although Platform-A has key offices in Baltimore and San Francisco too.

Here is the letter AOL CEO Randy Falco (pictured here) has penned to the entire staff about layoffs of 10 percent of its workforce–or 700 people–and other cost cuts, which the online service is announcing today.

“We’re at a pivotal point in AOL’s transformation, and need to be even more strategically focused and operationally efficient as we weather the economic storm,” wrote Falco, in part, about the move.

As BoomTown reported earlier today, Time Warner (TWX) online unit AOL is making huge staff cuts, due to the weak economy and the ensuing deep falloff in advertising revenue, but also because of recent structural changes made to refocus the once-mighty service.

The layoffs will take place over the next several quarters, with most of the U.S. cuts to be completed by March. AOL has 7,000 employees world-wide, with most located domestically.

Here’s Falco’s letter:

Dear AOL colleagues,

I’m writing to tell you about some important decisions we’ve made about AOL’s business and why we’ve made them.

The deepening economic recession has affected every corner of the economy, including our own. Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars.

As a result, we will be reviewing our entire organization to further align resources and expenses against the real revenue opportunities in this difficult market. Part of this will involve consolidating groups to gain efficiencies that will unfortunately lead to head-count reductions. We anticipate this will result in a net reduction of our workforce of up to 10% over the next several quarters–and we will attempt to finalize all domestic actions by the end of March. Reducing our workforce is never easy, particularly in the current climate, but our goal in doing this is to provide our core businesses the resources they need to thrive. Please know that, as always, we’ll be doing everything we can to help and support those affected, including offering severance packages and other services.

To further keep employment costs down, we will also forgo merit pay increases in 2009. This is a painful decision, but one that many companies have prudently taken to help minimize the number of layoffs they have to make.

To provide some perspective on these decisions, right now we’re two years into a three-year turnaround plan. Since day one, our strategy has focused on building and growing mutually dependent publishing, advertising and social media businesses to take advantage of the shifting media landscape. We’ve worked shoulder-to-shoulder to make considerable progress during this time.

We acquired best-in-class companies across the digital advertising space (AdTech, Third Screen Media, Lightningcast, buy.at, TACODA and Quigo, respectively) and integrated them with Advertising.com to build Platform-A, the largest, smartest display advertising platform in the world.

We grew our MediaGlow audience via an efficient content development model that in 2008 enabled us to launch more than 20 new sites that are generating significant page view (up 64% year over year in December), engagement (up 39% year over year) and unduplicated user (70+ million) numbers. This momentum will continue in 2009 with our goal of creating an additional 30+ editorially curated sites focused on consumer passion points.

We combined Bebo with our longtime community assets AIM and ICQ as well as newer acquisitions Goowy, Yedda and SocialThing, to build People Networks, gaining AOL a foothold in the critical social media space, with more announcements to come on the next phase of development in both the social media space and in the integration of social and publishing capabilities.

This progress continues to put AOL in a strong position to capitalize on our new business model when the recession ends.

In addition to focusing our investments, a successful turnaround plan also requires us to realign our cost structure against this three-pronged business model–making difficult decisions to cut costs in areas that aren’t critical to our growth. Splitting out the Access business improved the transparency of what’s working and what’s not, and allowed us to make better decisions about exiting businesses that weren’t performing while investing in growth areas. A successful turnaround plan also mandates we control costs, operate with healthy margins and position the company for sustainable growth. As you know, we’ve moved repeatedly to bring discretionary expenses in line to spare across-the-board job cuts.

But we’ve also had to make many hard decisions along the way. And this moment is no exception. We’re at a pivotal point in AOL’s transformation, and need to be even more strategically focused and operationally efficient as we weather the economic storm.

In addition to the head-count reductions and the 2009 merit pay decision, we are also making changes throughout the organization to improve efficiency and better align it to our three core businesses. This includes a review of our international operations and our global shared-services functions. In addition, we will continue throughout the year to carefully and thoroughly review all our products and services to make sure every one fully supports our strategy and has the potential for growth.

Finally, we are going to realize significant savings by continuing to consolidate our facilities–for example, moving from two buildings to one in Mountain View, from two floors to one in Los Angeles, and leasing unused space on our Dulles campus.

With these and other changes, we will take significant annual run-rate costs out of our business while, importantly, retaining the flexibility to invest in our growth strategy.

I know all this will raise questions, but I wanted to share as much as I could with you now. Senior management will provide more details as appropriate to their teams in the weeks ahead.

As difficult as things look right now, the economy eventually will turn around. Some companies will use this time prudently and make difficult decisions to come out of it in better shape–growing toward areas of opportunity, scaling back in others and maintaining a line on costs all around. Our only choice is to be one of these companies. With your continued hard work and dedication, we will position ourselves to emerge a stronger company ready to lead in a vibrant online market.

Randy

Time Warner online unit AOL is cutting 700 employees due to the weak economy and the ensuing falloff in advertising revenue, but also because of recent structural changes made to refocus the once-mighty service.

AOL CEO Randy Falco sent a memo this afternoon to AOL staff about the layoffs and other cost cuts being made, confirming the moves.

The 10 percent reduction in workforce will take place over the next several quarters, with most of the U.S. layoffs to be completed by March. AOL has 7,000 employees world-wide, mostly located domestically.

AOL is also eliminating merit raises, just as Yahoo (YHOO) and other digital companies have done recently, and consolidating facilities.

While Time Warner (TWX) has been trying to sell AOL to Yahoo, the online unit has also been shifting its resources, as part of a long-term turnaround plan. It has focused the company on three parts: its Platform-A ad unit; its communications and social-networking arm, People Networks; and its recently launched MediaGlow content studio.

It has also been in the midst of splitting out its longtime access business, which has provided the bulk of AOL’s revenues and profits, which sources said has given its top execs insight into what its future business model should be.

Besides the layoffs and cost cuts, sources said AOL was also looking at paring its international business, which has never been particularly successful.

As part of its ongoing moves to make New York its main HQ, AOL will also be consolidating facilities in Silicon Valley, Los Angeles and at its original homestead in Dulles, Va., although not closing it completely.

Much as throughout the online advertising industry, AOL has seen drastic declines in growth. In a recent financial report, AOL said its ad business dropped almost 20 percent year over year.

And AOL’s worth has also declined, with Google (GOOG) recently writing down its 2005 investment of $1 billion in the online service, which valued it then at $20 billion. It is now valued at $5.5 billion.