AFI BLOG: Media and Technology

Dead Man Walking - Fast Company

On the verge of a revival last year, AOL suddenly imploded. The inside story of a journey to nowhere.

In May 2007, nearly six months after he was hired, AOL chief executive Randy Falco gathered his employees together for an “all hands” meeting at the company’s Dulles, Virginia, headquarters. Until then, Falco had remained a mystery to much of his team, often holed up at the New York offices of Time Warner, AOL’s parent. He had spent 31 years at NBC, rising to the top as the network was sinking to fourth place. Many in Virginia wondered why the board had chosen this old-media type. There were rumors he barely used email. The meeting took place at Seriff Auditorium, AOL’s largest. It was the nerve center from which the company’s brain trust had hooked America on the Internet, a triumph that changed the world and threw off fabulous lucre. Falco, 54, a large man with pale skin and silver hair, was dressed strategically in a casual sports coat and an open-collared shirt. His executive team sat in the front. As he delivered his remarks, bathed in cool PowerPoint light, his halting image was Webcast to employees in their cubicles across the sprawling white-brick-and-glass campus.

The event was intended to rally the troops. Falco’s handlers had rotated the seats in the auditorium 90 degrees, a gesture signifying change. New chief operating officer Ron Grant — who had been plucked from the staff of Time Warner’s then-president Jeff Bewkes — led off with an attempted joke about the seating arrangement: “I don’t think there was a single good decision made in this room, so I’m glad we switched it.” Falco also tried humor. A line about his head of technology fell flat, giving engineers the impression he hadn’t yet learned the man’s name. Later, Falco directed some of the blame for AOL’s downsizing on the victims themselves. “Smart companies don’t lay off excellent people,” he said.

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