New AOL Chairman and CEO–and About-To-Be-Ex-Googler–Tim Armstrong Speaks!

Published on March 12, 2009
by Kara Swisher


For a tall man, Tim Armstrong has been on an awful lot of online companies’ short lists.

For a big Web exec job, that is. Indeed, whenever one opens up in the Internet space, the 6-foot 3-inch Google ad sales exec always pops up on it as a possible candidate to lead a variety of digital companies and start-ups.

Finally today–after longtime speculation that Armstrong had long wanted and would eventually leave his post at Google (GOOG) in order to try his hand at being top dog–he took over as chairman and CEO of the once-mighty, but now-not-so-much, AOL.

Armstrong, 38, will start at AOL on April 7.

“For me, it is a great opportunity to go to what I consider a top-five Internet brand,” said Armstrong, in an interview with BoomTown this afternoon, with a whole lot of the diplomacy and nice-guyness he is well known for at Google and in the online advertising industry. “I am looking forward to taking what I have learned at Google and seeing what I can bring to really help AOL.”

Noting that for all its decline–pointed out by me–AOL was still one of the few “global Internet brands,” Armstrong said he thought there was still a lot of juice in the consumer appeal of AOL.

So much so, he added, that AOL owner Time Warner (TWX) has given him a lot of options for its future, from keeping it inside the larger media conglomerate (unlikely) to partnering with another company (less unlikely) to spinning it out (likely!).

“One of the things we discussed was making sure we were able to have the best outcome for AOL,” said Armstrong. “That could take the form of a lot of different paths.”

(Translation: As soon as the economy brightens, I am going to become a public company CEO, just like my soon-to-be-ex-boss Eric Schmidt!)

The move to put Armstrong in at AOL was sudden and swift, and also more than a little cutthroat on the part of his new employer, which bounced current Chairman and CEO Randy Falco and President and COO Ron Grant without a lot of warning to them or any top exec at AOL.

While there has been much talk about when Time Warner would become weary of the pair’s management of AOL–which has been rocky (most especially their overpaying for the Bebo social-networking site, which others at Time Warner never got over)–their defenestration and Armstrong’s installation happened rather quickly.

And, indeed, Armstrong confirmed that the talks to take over at AOL had only started a few weeks ago, increasing in “intensity over the last week.”

So intense, for example, that Grant only found out he was being replaced this afternoon after a personal visit from Time Warner CEO Jeff Bewkes, who made a rare appearance at AOL’s downtown Manhattan HQ to deliver the bad news.

(One AOLer’s funny, but entirely imaginary, vision: Bewkes signed up Armstrong, whose Google office is right nearby AOL in New York, and then hightailed it over to AOL to drop the hammer before the ink was dry on the contract.)

Via a coup or not, nabbing Armstrong is indeed a coup–at least from a shiny resume point of view–for Bewkes, who has been struggling with what to do with AOL for a while.

While he often affably jokes about its many problems–from declining ad sales to management turmoil to, it must be said, increasing irrelevance–Bewkes has been trying to sell off AOL or turn the asset into something more valuable for far too long.

Bewkes knows Armstrong well, as Google is a major partner of AOL in search advertising, and Google also owns five percent of AOL, in a deal in which Armstrong was involved (and whose value the search giant recently marked down).

Armstrong said he was also close to Time Warner General Counsel Paul Cappuccio.

“It was a natural fit with AOL, since I know the company so well,” Armstrong said, adding he would spend his first weeks getting to know AOL’s employees and its products better, before making more concrete strategic decisions or changing any course setting of Falco’s.

Under Falco’s plan, AOL was focusing on a three-pronged strategy: social networking and communications (People Networks), content (MediaGlow) and advertising (Platform-A).

“In general, I do want to spend time with the staff,” he said. “Some of the stuff I have seen so far has actually paid off…and a lot of the new products show a lot of passion.”

Whether he can turn passion into blockbuster products is another story, and some are worried that Armstrong’s experience is too heavily weighted in ad sales rather than in development of killer services, which is what AOL might need to recover.

But Armstrong said he had a lot of other operational duties at that search giant, noting that “Google is a very complex business.”

And both current and former AOLers hope his ad experience will allow AOL to return to its strong premium advertising roots that were less focused on of late. In fact, Falco recently hired former Yahoo (YHOO) sales head Greg Coleman to do just that.

And Armstrong has a lot of support from unusual sectors too. Wrote former AOL head Jon Miller, who was, ironically, forced out by Bewkes in favor of Falco and Grant, to me in an unsolicited email: “Count me amongst the Armstrong fan club.”

And, many staff at AOL I spoke to today–whose morale has been buffeted by layoffs and ongoing bad news–seem genuinely thrilled to score such a prominent exec.

“I am so thrilled. We couldn’t change the DNA with Rondy on top,” said one exec, referring to the derisive nickname that Falco and Grant had within AOL, which combined their two first names. “I feel really positive.”

So does Armstrong. “I am really looking forward to running AOL,” he said.

And personally, as a longtime and clearly obsessive watcher of AOL, I am looking forward to seeing him try.

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