- The Washington Times - Tuesday, September 18, 2007

AOL Inc. said yesterday it plans to move its headquarters from Northern Virginia to New York City as the once-dominant Internet service provider repositions itself as an advertising network.

AOL, with more than 4,000 employees working out of its Sterling, Va., campus, is the second-largest employer in Loudoun County after the public school system, according to the Virginia Employment Commission.

The company, the Internet division of Time Warner Inc., plans to set up a network to help advertisers purchase online ads and track the effectiveness of their campaigns.

Top executives will relocate from Sterling to their new Greenwich Village offices at 770 Broadway near Union Square in April, AOL Chief Operating Officer Ron Grant said yesterday. He declined to say how many people will work in New York and whether jobs will be cut.

Employees responsible for advertising and creative programming will also transfer to the new location, closer to the New York ad companies AOL acquired in the past three years. AOL said the move is the final step in its strategy to become an advertising-focused company.

The company said it will maintain “significant operations” in Virginia.

“It’s vitally important to be closer to Madison and the advertisers,” Mr. Grant said in an interview. The area around Madison Avenue in New York is home to ad agencies owned by Omnicom Group Inc., Interpublic Group of Cos. and WPP Group PLC.

AOL will transfer 400 to 500 people who are already in New York, Mr. Grant said.

Tony Howard, president and chief executive officer of the Loudoun County Chamber of Commerce, said the move is good for the county if it means keeping the company successful.

“I don’t necessarily see it as a bad thing if it ultimately allows AOL to realize its vision of changing its business model,” Mr. Howard said. “If the likelihood of the company being successful means moving just the top brass to New York, then you have to view it as a good thing” for the jobs in Sterling. “But time will only tell.”

AOL, which previously focused on Web-access subscriptions for revenue, is competing for ad money with larger rivals Yahoo Inc. and Google Inc. Time Warner Chief Executive Officer Richard Parsons said earlier this year that he will assess by year’s end whether AOL’s focus on online advertising was the right strategy.

c This article is based in part on wire service reports.

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