Since Falco joined AOL in November 2006, he can’t be blamed for the world’s worst deal—the AOL/Time Warner merger.
The former head of NBC Universal’s TV group is remarkably bullish in his memo explaining why 20 percent of AOL’s work force is getting the boot. AOL’s “products are once again creating buzz in the market,” wrote Falco. That’s small consolation for those who are getting Falco’s thanks and help “in their transition to new opportunities.” He does promise “generous severance packages.”
Falco says though AOL is only a “year and a month into our transformation, the turnaround has been dramatic.” The company is in a position to “win as an advertising-supported business.” A caveat: “We have a bright future as a company if we can execute on this vision.”
That vision thing is a big problem. Wall Street has heard it all before, and didn’t exactly give Randy a solid round of applause for the latest round of cutbacks. AOL’s stock is down today and has been a dud this year.
The stock lost all of the gains that it had picked up when Carl Icahn was causing so much trouble for TW CEO Dick Parsons.
Jettisoning AOL would be a sensible strategy for Parsons, who gets praise for restoring a sense of stability at TW following the exits of former CEO Gerry Levin and AOL founder Steve Case.
Parsons, noted for his calm demeanor, is planning to relinquish the CEO reins to his deputy Jeff Bewkes. He should shake things up a bit by ditching AOL, giving Bewkes a clean slate to work with.
That would be a fitting legacy for Parsons. Wall Street would also cheer.