When Time Warner tapped Randy Falco, then president of NBC Universal television, to head up AOL, it was a sign that old media and new were increasingly merging. The way to save revive its struggling Web brand, the conglomerate was saying, is to bring in someone who knows how to build a huge media business and sell it to top tier advertisers.

A little over two years later, old media is out and new media is in. By firing Falco and replacing him with Tim Armstrong, the head of ad sales for Google, it's admitting an experienced network hand isn't the solution. The answer, Time Warner CEO Jeff Bewkes hopes, is a less experienced new media hand who knows how to generate revenue.

That, in a word, is AOL's problem. Google and Facebook may have surpassed it in buzz (and even pageviews), but it's still a relevant worldwide brand for millions of people. And traffic is actually up. As PaidContent noted, pageviews were up 14% in the most recent quarter. AOL has executed a strategy of focusing on a diversified group of brands like FanHouse, Asylum, and LemonDrop, following the path of one you might have heard of called TMZ. New people are coming, while the portal's traditional aud of middle-aged women keeps using the home page to discover what's relevant. AOL has even started to integrate content from other mail services and social nets, while at the same time drawing on the successful Bebo (which it acquired in what even Bewkes has said might have been an overvalued deal).

But there's the little matter of revenue. At the same time that pageviews were up, total ad revs fell six percent and the revenue at AOL's own sites (as opposed to the ones it services through its Platform A division) plummeted 15%. That's no help for a media company that wants to raise its stock price, and that is hoping to either spin-off its Internet division or sell it.

In a brief interview with AllThingsD, Armstrong (left) admitted that's most likely his job, stating, "One of the things we discussed was making sure we were able to have the
best outcome for AOL. That could take the form of a
lot of different paths.”

So Falco and his predescessor Jonathan Miller have managed to transition AOL from a subscription service to a moderately successful, and popular, Web portal. But they couldn't turn it into a business. Falco's decades of experience growing one of the world's biggest television businesses just didn't translate. Time Warner is hoping that by ditching someone who built an old media business for someone who helped build the world's biggest new media business, it can find the way to monetize that transition, at least enough to convince somebody to take AOL off its hands at a decent price.

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