June 29 (Bloomberg) -- AOL Inc., the online publisher, promoted Chief Financial Officer Arthur Minson to the role of chief operating officer, a new position where he will reorganize AOL’s operations into three units.
Minson will also continue as CFO until a replacement is found, Chief Executive Officer Tim Armstrong said in a telephone interview. The company has hired executive recruiter Peter Crist to find a CFO, Armstrong said.
“The move allows me to focus on product development and day-to-day strategy, while Artie, from an operational capability, can move us faster to profitability,” Armstrong said.
Since the web portal was spun out of Time Warner Inc. in 2009, from what Armstrong calls the “worst merger in history,” he’s been working to transform AOL into an ad-based digital-publishing business. The company bought the Huffington Post for $315 million last year and invested as much as $300 million in Patch, a local-news division that Armstrong sees commanding about $50 million in sales this year.
Minson will reorganize the company’s operations into a consumer products group that includes the Internet access business and its e-mail service; content brands including Huffington Post and technology website TechCrunch; and Advertising.com, its business-to-business advertising group.
Arianna Huffington, editor-in-chief of the Huffington Post, will continue to report directly to Armstrong while the news site’s operations will be overseen by Minson. The company’s sales and technology teams will continue to report directly to Armstrong, as well as corporate services groups such as human resources and legal.
“We are organized and ready for the second half of 2012 and we will continue pressing forward aggressively to accelerate our growth across our businesses,” Armstrong wrote in a memo to employees distributed today and obtained by Bloomberg News.
The company in May reported a more than fourfold jump in first-quarter profit on improved online advertising revenue. Total advertising revenue in the period ending March 31 increased 5 percent to $330.1 million, while U.S. display advertising fell 1 percent to $118.9 million, the first decline in the last five quarters.
Facing a slump in sales, AOL agreed in April to sell and license patents to Microsoft Corp. The company is selling more than 800 patents and related applications to Microsoft and will grant the software maker a nonexclusive license to its retained patent portfolio.
The move has helped lift AOL’s stock price, which has gained 82 percent so far this year.
The rising stock price bolstered Armstrong’s case as he fended off an activist investor’s bid to shake up the board earlier this month. Starboard Value LP, an investment firm owning 5.3 percent of outstanding shares, had fought to install three directors, saying AOL was spending too much money on failed efforts such as the Patch news sites.
The firm also estimated that AOL’s display-advertising business is losing as much as $500 million annually.
Yesterday, AOL started a $400 million stock repurchase as part of a plan to return funds to shareholders from the $1.1 billion patent sale. The company, based in New York, rose less than 1 percent to $27.50 yesterday at the close.
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