AOL CEO Randy Falco Lists Goals For 2009

Posted Feb 27, 2009

AOL CEO Randy Falco has presented a list of goals to achieve for 2009.  Over the last decade, AOL has been transitioning from an ISP to a content production company powered by advertising.  AOL’s revenue has been hit hard as their it has dropped 23% in the 4th quarter. AOL had to also lay off 10%, or 700 employees as a result.  Quite a few executives have been quitting and shuffling in the process as well. Below is the full memo that Falco sent to AOL employees (after the jump via WSJ):

AOL?s 2009 Goals

Dear AOL colleague,

This year marks the third of our three-year turnaround plan for AOL. Over the past two years, we?ve transformed the company and focused on three key growth businesses ? MediaGlow, Platform-A and People Networks ? positioning AOL to succeed over the long term.

Last year, we saw progress in each of these businesses. MediaGlow experienced sustained and healthy increases in users and engagement, proving we can grow our Web audience by creating experiences that appeal to people?s passions. Our People Networks unit embarked on a series of innovations and integrations that will set our social media experiences apart from the competition. On the advertising front, we integrated our acquisitions and made progress in other areas, although we continue to face challenges in premium display ad sales, which we are aggressively addressing.

If 2008 was about aligning our company against our core businesses, this year is about executing on our goals in what?s sure to continue to be a difficult market.

To succeed, we?ll need to continue operating as efficiently as possible, taking advantage of every available opportunity and remaining focused in a noisy marketplace. Our 2009 goals are designed to provide that focus. The goals may look familiar to you, which is a testament to the fact that our strategy over the past two years is the right one. As before, each of these goals will have specific metrics attached to them, which your business leaders and managers will be communicating in the near future.

Publishing. Over the past 18 months, we?ve reinvented our approach to programming, and as a result we?re successfully and efficiently reaching a younger and more valuable audience. This year, our new MediaGlow business unit will build on this momentum, launching 30 new edited niche sites and thousands of automatically programmed sites, creating original programming in our Los Angeles and New York studios and growing our audience worldwide, while continuing to enhance our ability to monetize our programming.

Advertising. Platform-A today offers advertisers easy access to the largest reach and the most sophisticated set of advertising tools available online, thanks to the integration last year of our seven advertising acquisitions. This year, we will build on Platform-A?s unmatched strengths to help marketers fully harness digital media to build brands and enhance online performance, worldwide.

Social Media. People Networks? mission is to connect people with everyone and everything they care about. Last year, the group focused on integrating Bebo, AIM, ICQ, Goowy, Yedda, SocialThing!, Userplane and our other community properties, which combined reach more than 90 million worldwide. This year it will launch a series of innovations that leverage the strengths of this integration, starting this month with breakthrough updates to Bebo, and proceeding to a program to socialize the Web, updates to AIM and much more. In 2009, People Networks will create the most engaging and useful social media services available with the goal of making it simple for consumers to live their lives online.

Products & Technologies. In 2008, the Platforms team grew the Search business worldwide by more than 7% year over year and the MapQuest and Commerce & Marketplace teams showed strong profitability and feature innovation. At the same time, the global publishing and Relegence teams helped build out the systems that would become MediaGlow. The Products team focused its efforts on core products ? Mail, Mobile, Desktop and Toolbars ? that offered us the best opportunities for growth, while exiting dozens of underperforming ones. This year, the combined Platforms and Products teams will continue to innovate on these core products and services. The Technologies team will continue to improve our ability to launch and scale new sites and manage our data centers and network as efficiently as possible.

Access. Over the past two years, the Access team has done a remarkable job of managing this business, expanding margins, improving our ability to convert subscribers to free users and cutting costs, while maintaining the quality of the service. Access continues to be an important source of revenues and profit for the company, and this year, the team will continue to deliver in these areas.

Cost Management. Our efforts to effectively manage costs across the board have been a significant success, positioning AOL for the troubling economic times we currently face. In 2009, we will continue to look for ways to prudently manage our business and align costs with our ad-supported business. This isn?t just about cutting costs, it?s about smart resource allocation.

Living Our Values. Achieving our goals will mean nothing if we lose site of our company?s values. Living our values ? integrity, collaboration, inclusiveness, outward focus, innovation ? is a prerequisite to hitting our numbers. In 2009, we will continue to embody all of our company?s values and behaviors in everything we do.

You know as well as I do that this year will present us with new trials, new surprises and new opportunities. I?m confident that by working together, guided by these goals and our shared values, we?ll achieve much in 2009.

Thanks for everything you do every day to make AOL great.