AOL BREAKS UP CORPORATE STRUCTURE REDGATE CHIEF LEONSIS WILL OVERSEE ONLINE SERVICE BRAND

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America Online last week moved quickly to capitalize on its strong subscriber momentum and recent acquisition of Redgate Communications Corp., forming four new divisions.

AOL named Redgate President Ted Leonsis president of AOL Services Co., a new division overseeing content, marketing, new-media opportunities and corporate development for the online brand. In addition, AOL formed divisions covering Internet applications, technology and international operations, all with the goal of creating an international network combining information, communication and transaction capabilities.

Mr. Leonsis will move to AOL's Vienna, Va., headquarters, relinquishing his post at Vero Beach, Fla.-based Redgate, which AOL acquired in May for $35 million. He will not be replaced; day-to-day oversight at the new-media company will be handled by Exec VP Ray Oglethorpe and Chief Operating Officer Chuck Clemente.

"All his skills would be well leveraged as head of the America Online Services Co.," said AOL President-CEO Steve Case in an interview. "There were a lot of synergies between what we were doing on our brand side and what Redgate was doing. We hope to develop more engaging multimedia content."

Another new division, Internet Services Co., headed by Mr. Case, will help subscribers and marketing partners access the interactive communications network and ultimately develop new content and revenue streams.

Providing both subscribers and non-subscribers an "on-ramp" to the Internet will boost the company's brand and facilitate AOL's hope of "popularizing the Internet," Mr. Case said.

AOL International, headed by President Jack Davies, formerly senior VP at AOL, will link subscribers and advertisers domestically and in Europe and Japan. AOL Technologies, headed by President Mike Connors, for merly VP-development and operations groups, will develop new communications systems for the service.

The effort comes as AOL attempts to build on recent subscriber gains. AOL tripled its s ubscriber base to more than 1 million in the past year; the company plans to surpass 2 million by next year.

"We want to be the No. 1 consumer online service," Mr. Case said. "We want to be the leader in the Internet. We want to be the leader internationally. We want to be the leading technology innovator."

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