August 6, 2002 4:26 PM PDT

AOL names Miller to top post

AOL Time Warner named former USA Interactive executive Jonathan Miller as the chief executive of its America Online division Tuesday.

The move, which was expected, ends a search for a permanent CEO for the AOL Time Warner unit. In April, Barry Schuler stepped down as CEO and was replaced by former AOL Time Warner Chief Operating Officer Bob Pittman to fix the division's deteriorating online advertising revenue.

"Jon Miller is absolutely the right person to lead America Online into its next stage of growth," said AOL Time Warner Chief Executive Richard Parsons in a statement.

"Jon's success in building consumer-driven businesses online and offline has given him the right blend of expertise and experience to revitalize America Online. He is, moreover, a person of unquestioned integrity and character and a great team player, to boot."

In an interview with CNET News.com, Miller acknowledged the company's troubles yet was bullish on its prospects for recovery.

"AOL, despite all the other kinds of noise, is the dominant, greatest interactive media platform in the world," he said. "The things that are going on here--and the business issues that have been raised--I believe to be addressable by having a focus on the user and the product, and driving value for that user." He added that "redefining and restating the business model is appropriate so people understand what to expect from this company."

Earlier this month Pittman left AOL Time Warner and his position as American Online's interim CEO. Pittman had taken much of the blame internally for AOL Time Warner's plummeting stock price, which was exacerbated by the losses in ad revenue and overall subscriber slowdown in the America Online unit. Former Time Inc. CEO Don Logan and former Home Box Office CEO Jeffrey Bewkes were promoted to take over Pittman's responsibilities.

Miller formerly served as CEO of USA Interactive's Information and Services Group, which oversaw that company's e-commerce properties including Ticketmaster, CitySearch, Expedia and Match.com.


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During his tenure at USA Interactive, Miller was known as an operations executive who made the company's Internet brands function smoothly together. But Miller's authority had a clear ceiling that stopped at Barry Diller, the Hollywood mogul and CEO of USA Interactive. Miller departed USA Interactive in June because he wanted to become his own boss, according to a source close to Miller.

Miller went on to head an e-commerce start-up funded by Boston-based venture capital firm General Catalyst Partners. Before working at USA Interactive, Miller held positions at Viacom, the National Basketball Association and Public Broadcasting Service station WGBH in Boston.

With AOL, Miller once again will operate under the watch of some strong personalities, but none as eccentric as Diller. Miller inherits an AOL that has been vilified by the other traditional media divisions at AOL Time Warner and blamed for dragging down the company's stock to all-time lows. But compared to the scrutiny on his predecessor, Pittman, the spotlight on Miller is dimmer.

"Pittman was a lightning rod for criticism for AOL and the merger," said Dennis McAlpine, managing director of investment research firm McAlpine Associates. "Miller comes in without any of those burdens."

Still, Miller enters into an AOL suffering from low employee morale, a top-heavy executive structure, revenue difficulties in advertising and slower subscriber growth. More troublesome, AOL is now in the shadow of a preliminary fact-finding investigation by the U.S. Securities and Exchange Commission into questionable accounting practices.

News.com's Stephanie Olsen contributed to this report.

 

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