AOL LAYS OFF 90 IN ONLINE MARKETING DIVISION

Most Cuts Were Local Ad Sales Positions

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NEW YORK (AdAge.com) -- Following Tuesday's layoff of 90 people, American Online's interactive marketing division is down to 550 staffers, a spokesman for the company said.

The widely anticipated cuts come as the beleaguered interactive unit of AOL Time Warner prepares to announce and execute a turnaround plan. AOL CEO Jon Miller will officially disclose the plan Dec. 3 to analysts and investors.

Move away from advertising
The job cuts appear to

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reflect AOL's anticipated move away from standard advertising toward a business model more dependent on subscription fees, sponsorships and transactional revenue from fee-based games, auctions and online commerce.

The job eliminations mostly involved local ad sales positions, account personnel and support positions based in New York and Dulles, Va. The 90 positions handled local ad sales and support, the spokesman said. AOL plans to concentrate resources for national ad sales in key regions including New York and Los Angeles.

Recent sales reorganization
Bob Sherman, president of AOL interactive marketing, had reorganized AOL's sprawling ad sales organization by region in the spring. The ad sales group had previously been organized vertically by industry such as automobiles and retail.

Also on Tuesday, AOL hired Lisa Brown, a former USA Interactive executive who worked with Mr. Miller, to lead an effort to integrate various pieces of the service's interactive marketing strategy including subscriptions, transactions and content.

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