New President of AOL Platforms Might Signal Push for Consolidation

As Verizon Tries to Buy Yahoo, Is AOL Preparing a Smooth Transition?

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AOL has promoted Tim Mahlman to president of AOL Platforms, a newly created position with oversight of both the company's sell-side ad platform, One by AOL: Publishers, and the buy-side One by AOL: Advertisers. Mr. Mahlman had been president of publisher platforms; the buy-side had been handled by Don Kennedy, who has left the company, AOL said.

Mr. Mahlman assumes responsibilities that had been handled by industry vet Bob Lord, who stepped down as company president in April to join IBM.

Tim Mahlman.
Tim Mahlman. Credit: AOL

The move may foreshadow a plan by AOL to consolidate its three open ad exchange platforms, where advertisers can buy digital inventory from a wide variety of publishers. It doesn't make much sense for any company to own more than one exchange. And the total under one roof could grow to five if Verizon, which bought AOL one year ago, succeeds in buying much of Yahoo's assets.

"The whispers I've been hearing is it's coming and it is coming quickly," said a CEO at a leading programmatic company, speaking on condition of anonymity to protect industry relationships. "You have to imagine Verizon has gotten to the point now where it's gotten its head around the business and they're looking at three duplicative platforms and saying, 'Why are we paying three times the engineering cost, three times the infrastructure cost and maybe not three times the personal cost, but probably something close to it?' I'm sure it has gotten to the point now where they have to start to right the ship."

AOL CEO Tim Armstrong has been rapidly buying up ad tech providers, spending more than $1 billion to buy some 20 companies and fitting them together into three offerings facing publishers and advertisers: One by AOL: Video, One by AOL: Mobile and One by AOL: Display.

Advertisers consider AOL a high-quality alternative to Google and Facebook's walled gardens, enhanced by Verizon's wealth of consumer data. While they experience a streamlined process when buying and selling ads, however, AOL acquisitions such as Millennial Media, Adap.tvand Adtech still work separately on the back end, leading to increased costs for AOL and customers.

Mr. Mahlman said putting AOL's buy and sell sides under one executive would benefit the company and clients. "We have never had one person devoted entirely to that on just one platform," he said.

Mr. Mahlman declined to comment on whether the company plans to consolidate its exchanges or what he would do should Verizon acquire Yahoo's assets. "I'm playing with the players I have on the field today," he said. "And my charter in how I'm building the AOL platform strategy, and aligning the supply and demand with engineering and product, that is what I have today to work off of."

The final round of bidding for Yahoo, which is valued between $4 billion and $8 billion, includes telecom giants Verizon and AT&T as well as private equity firms TPG, Advent International and a partnership of Sycamore Partners and Vector Capital, according to Bloomberg.

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