Randy Falco is the new chairman and CEO of AOL, leaving Jon Miller on the outs after four intense years leading the challenged Time Warner unit. According to the announcement by TW Chairman and CEO Dick Parsons and COO Jeff Bewkes (very deliberately in the name of both executives), Falco is being brought in for his operational know-how and his strong advertising background. Parsons: “A key to Time Warner’s digital future, AOL is showing early success in transitioning to an advertising-focused business model, and Randy is a first-rate choice to ensure AOL realizes its promise. We thank Jon Miller for his four years of far-sighted leadership during a difficult time at AOL. We wish him well as he moves into the next phase of his career.” Bewkes: “I look forward to working closely with Randy and the talented team at AOL as they increasingly capitalize on the rapid growth of online advertising.”

What this actually means for the “talented team at AOL”—already in the midst of a reorganization following the shift to an ad-supported, free services strategy—remains to be seen. Will we see an incoming round of Falco associates? The displacement or departure of senior execs like Kevin Conroy and Jim Bankoff? A TW spokesperson told me it’s premature to comment on how others at AOL might be affected by the move. That’s especially true since there is no official start date for Falco or departure date for Miller, who is leaving Time Warner completely.

In an odd way, this is an endorsement of the strategy now in place. Falco, thought to be feeling crowded at NBCU, wasn’t headhunted for a job AOL was trying to fill. Rather, he was suggested by TW insiders as the right person to fill a job that had changed with the strategy. His job will be to bring his operational and ad skills to bear on execution. Falco’s decision to join AOL also has a certain sense of accomplishment for TW—something must be going right at AOL if someone the caliber of Randy Falco is willing to take the job.

Miller, meanwhile, is getting plenty of verbal pats on the back for getting AOL back in the game—and presumably a decent parachute.

Update: A little more about Jeff Bewkes and AOL. Bewkes is responsible for AOL and played an integral role in the surprising August decision to gamble on replacing billions of dollars from service subscriptions with ad-supported revenue instead of viewing advertising as an additional revenue stream—vital but supplemental to the money coming in from walled-garden subs. Bewkes inherited Miller; with Falco he gets an exec of his choosing to execute a strategy he pushed. If it breaks, he owns it. If it continues to work, his path to TW CEO gets even smoother. Coincidentally, this move comes the same day AOL announced a venture with TW sib HBO, which Bewkes ran before starting his move up the corporate rungs and still oversees.
Update 2: The Washington Post has a good look at Miller’s contributions to AOL since joining the company in 2002. “One source close to the changeover speculated that Miller’s strength may be in turning a business around, while Falco’s is in operations, now that AOL is seen to be on the right track. Miller would have liked to stay in his job, said the source, who spoke on condition of anonymity because of the sensitive nature of Miller’s exit.”
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Related: AOL May Name New CEO Or President This Week; NBCU TV President Randy Falco In Talks For It: NYT
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