Another call for AOL management’s head: Pali Research analyst Rich Greenfield says it’s time for AOL (TWX) bosses Randy Falco (“a TV executive with no Internet industry experience”) and Ron Grant (“Jeff Bewkes’ chief of staff, whatever that means”) to get the heave-ho.
In a blog post (registration required), Greenfield argues that Randy and Ron have no real plan to turn the business around and have “squandered the strong free cash flow generated by AOL.”
Virtually every layer of AOL management and senior operating executives have turned over at least once in the past few years, either through executives quitting or AOL lay-offs (due to cost-cutting or strategy shifts), yet the “dynamic duo” at the top of AOL remain entrenched. It seems obvious to us and investors we talk to that AOL is a dying business, a so-called dinosaur with a “toxic” brand. What frustrates us is that Time Warner management and its Board of Directors have allowed AOL to annually reinvent themselves in hopes of enabling growth.
Meanwhile, AOL is in the middle of another round of layoffs, part of a “three-year plan” seemingly pulled from thin air.
In discussing pending layoffs (that have actually just begun this week), Falco insinuates that there was always a three-year plan for turning around AOL, yet we cannot find any mention of a three year-plan prior to 1/29/09 (we confirmed the lack of a three-year plan with multiple former AOL execs).
The solution, Greenfield argues: Fire Ron and Randy and “turn AOL into a ‘cash-cow’, with the business starved for cash for as many years as it has left.”
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