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Another Ex-Googler Heads to AOL
AOL has tapped Shashi Seth as Senior Vice President of Global Advertising Products. Seth was formerly with Cooliris and before that was at Google. Prior to leaving Google, he was charged with the difficult task of developing monetization strategies for YouTube. Seth previously was the Product Lead for Web Search at Google.
Seth also spent time at eBay, where he managed APIs & Platform. Before that, he launched Gap’s online stores. Seth began his career at NASA.
“Shashi is unmatched in the industry as an innovator with an outstanding track record of developing new and better ways to serve advertisers on the Web,” said Jeff Levick, President of Global Advertising and Strategy at AOL. “As we move forward on our strategy of becoming the world’s largest provider of display advertising, Shashi will play a critical role in creating the best products in the business for our advertising partners.”
Seth is the latest of the fresh talent to head to AOL. Earlier this year, Tim Armstrong left Google to head up the struggling internet company. A few weeks ago, news came that ex-Yahoo! Brad Garlinghouse of “Peanut Butter Manifesto” fame is joining AOL as well.
Ex-Yahoo! and Author of ‘Peanut Butter Manifesto’ Brad Garlinghouse Heads to AOL
In 2006, Brad Garlinghouse made waves at Yahoo! by releasing the “Peanut Butter Manifesto,” which outlined a bunch of organizational and administrative problems he felt Yahoo! had. As senior vice president at the time, he felt Yahoo! was spread thin and needed focus, leadership, and accountability.
During the turbulence that accompanied the post-Microsoft acquisition rejection, Garlinghouse left Yahoo!
Now, he’s been tapped to run Internet and mobile communications at AOL. He’ll be based in Silicon Valley.
Garlinghouse isn’t the only big name to join AOL. Tim Armstrong left Google to run AOL earlier this year.
Stephane Panier Named by AOL as Global Head of Bebo
To fill the top position of global operations at Bebo, AOL (which acquired the social network last year), promoted from within. VP and COO Stephane Panier will now oversee advancing the social network worldwide.
“Stephane is a proven strategist and operator with executive experience from some of the world’s leading brands and businesses,” said Brod. “He is the ideal leader to build on Bebo’s existing successes, to chart a course for its future, and to execute against that vision.”
Prior to joining Bebo this past January, Panier worked at Google for six years, holding upper level management positions in Finance and Operations. Before the Google stint, Panier was a management consultant for Booz & Company where he focused on energy and hi-tech.
AOL Advertising Revenue Down by 21% in Q2 2009
AOL parent company Time Warner released its quarterly earnings this morning and the news is not pretty.
Revenue came in at $804 million, a decrease of 24% over Q2 2008, which brought in $1.06 billion. The decline was almost evenly split among online advertising ($111 million, a 21% decrease) and internet access subscriptions ($135 million, a 27% decrease).
Time Warner has spent $20 million so far in the process of prepping AOL to become a separate, independent company. Earlier this week, Time Warner bought back Google’s 5% stake in AOL for $283 million, a big dip from Google’s original $1 billion investment back in 2005.
Time Warner Buys Back Google’s 5% Stake in AOL
When the Time Warner board voted in late May to spin off AOL, buying back Google’s 5% stake in the company would be a prerequisite for the sale. This week, Time Warner did just that.
The return on investment, however, was not so hot. Google invested $1 billion in 2005 to acquired the 5% stake. They only got back $283 million.
Other statements made in the filing are quite telling of the possibilities for AOL’s future. Google currently powers the search on AOL (including paid search). That will be in place until December 19, 2010, but they’re leaving open the possibility of ditching Google after that.
They may then strike up an agreement with an alternate search engine, such as Yahoo! or Microsoft, or Microhoo. Though, with former Google exec Tim Armstrong now running things at AOL, I’d prefer to see AOL go for broke and develop their own search engine.
AOL also plans to maintain some licensing agreements with Time Warner.
Ex-Bebo Chief Kate Burns to Head Up AOL European Sales
Kate Burns has been tapped by AOL to lead its European Sales division. Burns formerly ran social network Bebo, which was acquired by AOL last year. Prior to that Burns spent time at Adlink and Google UK.
“AOL has a solid foundation in Europe, with a strong Web presence in many countries and a leading advertising network, and I’m looking forward to working with my colleagues and with AOL’s partners to build on this foundation,” said Burns.
Burns will report to AOL Global Advertising and Strategy President Jeff Levick
“Europe is key to realizing our mission of being the largest global platform for online display advertising. Kate is the right person to build our European management sales team and lead this effort,” said Levick. “Kate is a well recognized and highly respected leader in Europe who has the talent, energy and determination to scale our European operations and deliver on this strategy.”
AOL maintains ad operations in nine European countries including Denmark, Finland, France, Germany, Netherlands, Norway, Spain, Sweden, and the UK.
AOL Not the Bright Spot in Time Warner’s Q4 2008 Earnings
While search was a bright spot in the earnings of Yahoo and Microsoft, and Google beat Wall Street estimates, AOL is not faring as well.
Time Warner released its 2008 fourth quarter earnings and AOL lost 18% in ad revenue. Last year, Time Warner announced that it would split AOL into two: media and internet access. The access division didn’t fare any better with subscriptions down 27%.
Time Warner has been trying to sell AOL. In the past year, they’ve talked to both Microsoft and Yahoo about a deal, but so far nothing has been negotiated.
Greg Coleman Named President of AOL’s Platform-A
AOL has named Greg Coleman as President of Platform-A, their display advertising network. Coleman previously served as search and ad targeting startup, President and CEO of NetSeer. Prior to that, Coleman was Executive Vice President of Global Sales at Yahoo! Coleman also worked in magazine publishing.
“Greg Coleman is perfectly suited to build on the foundation we created at Platform-A and drive branded display sales across our fast-growing MediaGlow programming network,” said Randy Falco, AOL Chairman and CEO. “Greg’s a seasoned sales pro who understands that online brand building is the next frontier in digital advertising, and that whoever can deliver marketers measurably improved branding online will be positioned for long-term success. I’m confident Greg will help us create branding solutions that leverage the strong success of MediaGlow and the upcoming launches at People Networks.”
Coleman replaces Lynda Clarizio, who came to AOL through the Advertising.com acquisition. Clarizio was President of Advertising.com.
Related Reading:
AOL’s Platform-A Reaches Now Reaches 160 Million in Europe
AOL’s Platform-A Collaborates with T-mobile for 2 Day, Billion Impression Ad Blitz
AOL’s Platform-A Unveils Plans for Self-Service Ad Marketplace Exchange
AOL to Cut 10% of Its Workforce
AOL will cut 10% of its workforce, according to Kara Swisher. That amounts to 700 employees.
The cuts will attempt to focus efforts in New York City, part of a gradual attempt to headquarter there. That will mean consolidation in Silicon Valley, Los Angeles, and the DC suburb of Dulles, site of the original HQ. It will also scaled down international business, which hasn’t served them well.
Last year, parent company Time Warner announced that it would split AOL into two: one part internet access and one part search/media. Time Warner has been attempting to forge a merger or sale with Yahoo for nearly a year now.
Google Beats Wall Street Estimates for Q4 2008, Despite Profit Drop
Google announced their earnings today as planned (though a bit early, but not as early as Microsoft) – and the news was good. They reported net revenue of $4.2 billion, while analysts’ estimates were at $4.12 billion.
Adjusted earnings (see below) translated to $5.10 a share, whereas the Street predicted $4.95.
However, the good news comes with a caveat. Net income saw a sharp decline, year-over-year. The fourth quarter of 2007 saw a net income of $1.2 billion while Q4 2008 saw “just” $382 million.
Aggregate paid clicks for Q4 were up 18% year-over-year and up 10% over the third quarter of 2008.
“Google performed well in the fourth quarter, despite an increasingly difficult economic environment. Search query growth was strong, revenues were up in most verticals, and we successfully contained costs,” said Eric Schmidt, CEO of Google. “It’s unclear how long the global downturn will last, but our focus remains on the long term, and we’ll continue to invest in Google’s core search and ads business as well as in strategic growth areas such as display, mobile, and enterprise.”
UPDATE (Kevin Newcomb): The huge dip in Google’s net income can be attributed to a $1.09 billion “impairment charge” Google took during the quarter, including charges of $726 million related to its investments in AOL, and $355 million related to its investments in Clearwire.
That basically means that Google is admitting it overpaid for those investments, and it’s using the turmoil in the broader economy to make up for that, without drawing too much fire from investors.
Without those charges, Google would have reported $1.62 billion in net income, or $5.10 per share, for Q4 2008, instead of the $382 million in net income and $1.21 earnings per share with the charges. That compares to $1.56 billion in Q3, and $1.20 billion in Q4 2007.
ClickZ News has more details in “Google’s Q4: Advertisers Keep Spending, Consumers Keep Clicking.”
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