Time Warner AOL (TWX): AOLers on AOL, Mgt, Layoffs, etc.

We have written frequently about AOL in recent weeks, and AOLers and other AOL experts have responded in kind.  Since the comments are distributed across a dozen or more posts, we figured it made sense to aggregate them.  Here is a sampling:


I’d bet Matrixed’s severance package that the actual announcements will be made by mid-level HR professionals.  — Lou Rawls

Lou – the last round was led by vp+ level people with scripts, but there may not be enough of those left this time? Hopefully it’ll at least be timed well enough to avoid a rush at the gates.  Being an adult who’s gone through > 10 rounds at various companies I have no angst about the upcoming flood but it’d be less galling if the layoffs were part of a serious and honest realignment of strategy. Sadly I don’t think this is the case but the subtext will be clear once it’s all done.  — Houbaa

October 16th is indeed the date [of the mass firings] and many of the lay-offs will be done by title in auditoriums (all svps report to this room at 9:30 and get fired).  Very old school.  Also, another very senior executive departure on [LAST] Monday—guess not everyone is happy with the lay-off Smithers and Burns* have planned.  — Source…  (A LOT MORE…)

At least they won’t be waiting until Christmas this time. After being with the company for almost 10 years and seeing layoffs at least once a year, there’s one thing you can absolutely bet on — HR will find some way to screw this up and make it as painful as possible for the employees. They are truly the keystone cops of this organisation.  — BAMBAM

Well, in my opinion, if Ron Grant were a real executive, instead of a bloodless corporate go-fer he would be doing some of the terminations himself. My guess: he won’t even be in Virginia when they do the firings. Smithers and Burns are focused on whether they are pleasing their overseers in NY and the decor in the new executive dining room. They approach this as an intellectual exercise, thinking only about their resumes and how they look and the next job. They forget that people actually need these jobs to pay rent and eat. By the way, Time, Inc has had worse results for a long time and certainly faces a bleaker future than AOL–so where are their lay-offs? — William

Wah wah wah.  Right to work state.  Right to quit and right to fire go along with that.  — Right to Work


If true, my money’s on Partoll or Conroy. They stand to lose the most from the upcoming actions. Cahall’s org will also be under pressure but since he was brought in by current management he will probably last a while longer. — Matrixed

Henry – It’s Wednesday, so I’d say your source whiffed on this particular pitch. But no worries, plenty more opportunities for his/her predictions. At this point it’s 50/50 that at least one AOL senior exec  departs in any given week.  — Matrixed

For the record, I am still batting 1,000, you may just have to wait for it for a little bit longer. Maybe Smithers and Burns have completed another lesson at the Richard Nixon school of leak management.  — Nick Charles


Why doesn’t anyone one talk about the quality and experience of the people running AOL. The CFO has never been a CFO anywhere at any level—but she knew Ron. Jon Werther hasn’t run anything, anywhere at any level, but he worked for Ron. If you look at the current executive ranks, the central qualification is having Ron like you—not being good at whatever it is you are supposed to be doing.  —Ron


Version One: It was Ron Grant’s fault
Version Two: It wasn’t Ron Grant’s faultOf course they missed the numbers, not sure they even knew themselves how badly they were going to miss. And look at how the lay-offs are being handled. Everything they touch turns to sh*t–but are they held accountable for their screw-ups? No–that’s not how TW treats its own. As Dick Parsons says, “We drink all we can and we sell the rest.” And he wasn’t talking about wine, you TWX shareholders  —Ron

I don’t see how [Version 2] gets Grant off the hook for Q2. If he knew search would “get hammered” with the changes then just having the quarter “on track” would not be near good enough to make up the difference. I think the reality is that he simply ignored the internal predictions because he is always the “smartest guy in the room.”  Internal teams grow weary of contradicting his dictatorial mandates because they are either ridiculed or ignored.  —Matrixed

There had been many previous tests showing that the change in the search results page would perform exactly as it did. I guess Ron figured not only was he smarter than everyone else in the room—but all of the users, too. For the record, I am still batting 1,000, you may just have to wait for it for a little bit longer. Maybe Smithers and Burns have completed another lesson at the Richard Nixon school of leak management.  p.s. if it’s ok for Ron to disclose confidential information here, isn’t it ok for everyone to do the same?  — Nick Charles

One other thing Henry — your references to the Search “team” are misplaced. The changes were not a team effort. There was a clear bifurcation in strategies, with Grant’s winning only because of his superior corporate position. He is a Web 1.0 manager in a Web 2.0 world. I doubt he even understands what that means.  Nick Charles – love your insights. I’d buy you a double expresso in the CC1 cafe anytime.  — Matrixed

What I love is the talk from Smithers and Burns [Falco and Grant] about improving the management and cleaning up all the mistakes that the last crew made. And then, less than a year into their reign, Smithers and Burns miss the numbers and better yet, forget to clue NY in. Maybe NBC knew something that TW didn’t???  p.s. Matrixed, I will take  you up on your kind offer, but maybe something a bit stronger is in order?  — Nick Charles


I think pursuing a hard core ad strategy, which builds upon ad.com, is the right approach especially since Yahoo is wounded, DoubleClick still isn’t closed, and MSN still hasn’t demonstrated a real ad strategy. In fact, MSN.com still can’t turn a profit after all these years. Yes, they bought aQuantive, but they’re so different from a real ad network so it’ll take them time to change. As for AOL, they still have some majors holes in their strategy. They need to pick a segment to win in. They also need a serious publisher acquisition strategy because it’s all about distribution.  — Stone

Sure, AOL can decide to rep other publishers ad inventory if it can’t show strong growth from ad sales on its own properties. A logical leg downwards, & into lower margin territory. But the root of their problem is that on their own properties they have nothing to distinguish them, nothing capable of pulling in new users, they’re just reliant on legacy momentum from a fast contracting base of dialup & former dialup subs, & bland, generic type offerings that the customer just knows he can find anywhere(TMZ being perhaps the only exception). If they don’t pick a content segment to win in, & actually win in it, the air’s going to just keep coming out of their balloon – no matter what decisions they make about maximizing search revenue.  — bandit

This well-considered discounting of how much enhanced targeting can do doesn’t go far enough. Since most of AOL’s volume is in email, IM, and other hard to target inventory, the amount that NEEDS enhancement is probably closer to 90% than 50%. However, most ad impressions are generated by a small group of heavy users. If frequency caps are in effect, and if heavy users don’t do a lot of web surfing on other sites in the behavioural network, then Tacoda will have the same trouble monetizing most of this traffic that AOL has today. Therefore, my guess is that increasing AOL’s run rate by $200 million (bottom of your 10% to 40% estimate) will take years and many new tricks.  —Bennett Zucker


Ted, it’s too bad you’ll never know how it feels to be one of the every-workers who frequently wonders about the safety of their job, and the direction of a seemingly clueless company.

I’m sorry Ted but I have to agree. If all you say are true, (and they are if you spin the numbers right) why isn’t there a single write up recently that takes a positive spin on AOL’s future? Our traffic is not up, it’s actually down. Our PV/UV is low, AIM traffic has flattened, and most of our UV and PV are from dial-up customers which is in a nose-dive. But these numbers we don’t like to talk about in public.

It seems we’ve had a new strategy every year. And I’ve supported each one of them. But as one of those employees who wonder every October whether I’m going to have a job come Christmas, it is very difficult to share in your enthusiasm. Most of us don’t have the stocks and options to retire on. But I believe that it truly is ’employment as will’ and if we are not happy, we should work elsewhere.

Most of us see the announcement of HQ moving to NYC as the nail in the coffin for AOL’s online portal/product/content business.

6 months ago, Randy Falco said,in response to comments about low employee morale, “We are done with layoffs. Ron and I are here to grow the company.” So, how are employees supposed to trust our new management?

You really have to walk to buildings to get the true feel of what’s going on. When is the latest time AOL’s top management really talked to the employees, walked the floors, commute to work, eat a meal in the cafeteria like every other employee?

Employees want to be told what’s going on even if it’s bad news. But what we learn, we get from outside sources like Valleywag and NYTimes [and Silicon Alley Insider!].

It would be nice to know our executives for a change. And that being an executive at AOL means more than sitting on the 5th floor of HQ, building an executive dining room, getting driven around in a limo, rerouting the employee shuttle and taking private jets.

…There’s something I don’t understand. Successful business don’t annually lay off large numbers of employees (or suffer through never-ending rumours of layoffs). Successful businesses aren’t plagued with constant rumours of their demise and irrelevance.

If we’re really that successful, there’s no excuse for the rumours, the layoffs and the uncertainty. Like I said, I just don’t understand it.


waves of mass firings
at Dulles

lay yourself off
in web 2.0

October 16 is the date
Boss’s Day

Two readers complained that the above verse does not conform to the standard 5-7-5 haiku format and is therefore not technically a “haiku.”  The author immediately submitted three additional haiku in the standard format:

waves of mass firing
grateful Dulles sunset fades
my white shirts increase

October 16
a National Boss’s Day
morning for my cube

platform A this way
happy workers to your queues
rush to catch the train

And one from “Marvin Gaye”:

October 16th
is my wife’s birthday. A sign…

you say? do you, Henri?

And another:

employees prepare
grim reaper moves to new york
high casualties soon

And another:

New job is needed.
Unemployment bites the bag
So does employer