|Jonathan Miller says the challenge of running AOL is 'hugely exciting.'
"I want to absorb as much as I can, meet the people here, understand them and get my arms around this business, which is hugely exciting," Mr. Miller told AdAge.com today.
While America Online's new chief executive has run successful online subscription-based properties at USA Interactive, he takes the reins of the online unit of AOL Time Warner at a critical juncture: Subscriber growth has dropped off, the transition to broadband remains sketchy, and ad revenue is still soft. The online unit also is preparing the launch of AOL 8.0 in early October and trying to repair relationships with advertisers -- all while cooperating with federal investigators looking into its accounting practices.
"I'm going in and I reserve the right to learn. ... But I believe we need to be very product-focused;
Doesn't get broadband
Regading broadband, Mr. Miller said that even in his upscale neighborhood outside New York City he's been unable to get broadband Internet access. "As a consumer, I love broadband, I can't wait for it to become prevalent and I'm going to have to wait."
He hinted that AOL would likely have highly segmented service offerings in the future -- broadband and dial-up, as well as new premium subscription offerings.
Mr. Miller and his boss, Don Logan, chairman of AOL Time Warner's Media and Communications Group, said they are assessing the talent within the AOL ranks before importing any other new executives.
"The first order of business is to continue to keep AOL the most successful interactive brand in the world and to continue to grow its profit and get rid of all the negative impressions and feelings that exist out there," Mr. Logan said. "AOL is highly profitable and performing well, but the business model upon which it's built needs to change. We need to shift the business model to adjust to changes in the marketplace. Jon's mission is to get [AOL] growing again, as quickly as possible."
AOL has seen its profitability slump as revenue growth slides. In the six months ended June 30, AOL reported earnings before interest, taxes, depreciation and amortization, or Ebidta, of $906 million vs. $1.5 billion for the same period last year. Even at $906 million however, AOL contributed more to Ebidta than such sibling units as Time Inc. or AOL Time Warner's TV networks business.
As for how to keep profits from hemorrhaging: "It can be achieved in a variety of ways, through segmentation [of services and products], growth in [subscriber] numbers, even in some decline of numbers, but I don't anticipate it. The key lever is subscriber profitability," Mr. Miller said.