AMERICA ONLINE CHIEF SHAKES UP DIVISION

Top Positions Eliminated; Troubled Business Affairs Unit Redeployed

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NEW YORK (AdAge.com) -- America Online CEO Jon Miller today announced a major shakeup in the executive ranks of the AOL Time Warner unit that creates a structure giving him more control over the unit's divisions.

The positions of chief operating officer and president were eliminated from the AOL's executive suite. The reorganization puts Mr. Miller in a hands-on, front-and-center role: Lisa Hook, president of AOL Broadband; Joseph Redling, president of Brand Marketing; and Bob Sherman, president of Interactive Marketing, will now report directly to Mr. Miller.

"The purpose is to align me with the key priorities and initiatives so we can move expeditiously," Mr. Miller told AdAge.com. Because AOL broadband services and programming are a key priority, "We want to show there is no ambivalence about broadband," he added.

Highly anticipated
The highly anticipated

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Jonathan Miller's First Day on the Job
reorganization represents Mr. Miller's first attempt to put his imprint on the troubled interactive unit since his appointment Aug. 6.

As expected, the overhaul also folds approximately 100 members of AOL's Business Affairs division into the business units they support, such as broadband and interactive marketing.

"What we want to have going forward is the business units themselves generating opportunities and being able to look at them broadly. ... The Interactive Marketing group, which encompasses ad sales, is really going to drive the business opportunities," Mr. Miller said.

Reaching out to ad agencies
At the center of this strategy will be Mr. Sherman, who heads AOL ad sales operation. His group will be responsible for fielding and cultivating relationships with advertisers and agencies with business affairs working closely with him.

"Part of our task now is to continue to build bridges to the ad agencies and ad community that Bob Sherman has already undertaken, [and] business affairs will support that," Mr. Miller explained.

The Business Affairs unit, comprised primarily of lawyers, has in the past negotiated ad and e-commerce deals, often independently of AOL ad sales. Some of those deals are under investigation by the Securities and Exchange Commission and the U.S. Department of Justice for allegations of improper accounting.

More accountable
The new structure seeks to make the Business Affairs teams more accountable and reporting to the individual units they serve. Many of in the department will remain at the Dulles, Va., headquarters of AOL, said Mr. Miller, who added that there were no plans for layoffs. While the department previously was the signatory on ad and e-commerce deals, AOL's legal department will now perform that function.

In other moves, Joseph Ripp, executive vice president and chief financial officer, becomes vice chairman, overseeing AOL's network infrastructure and technology operations (AOL has launched a search for Mr. ripp's successor). J. Michael Kelly, chief operating officer, was appointed chairman-CEO of AOL International, and Jimmy de Castro, the veteran radio executive who was appointed in April as president of AOL Interactive Services, becomes a member of a newly created Senior Strategy Group that works with Mr. Miller and Don Logan, chairman of AOL Time Warner's Media and Communications Group.

The change would appear to be a significant shift in responsibilities for Mr. de Castro, who had been leading programming on the AOL service. AOL Vice Chairman Ted Leonsis, a 10-year company veteran, will head newly created councils that will oversee brand, product and technology strategy.

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