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AOL names new sales head

America Online reorganizes its online sales division and taps an executive to spearhead the group, as the company struggles to rebuild its ad business.

America Online on Wednesday reorganized its online sales division and named a new executive to spearhead its operations.

AOL named Michael Kelly as president of the newly formed network sales and solutions division, which will oversee all advertising sales, search and commerce functions. Kelly, formerly president of global marketing at parent company Time Warner, replaces Lisa Brown, who left the company last week, after a brief stint running ad sales.

Along with Kelly, AOL named other executives to the group. David Lebow, former executive vice president of AOL media networks, will manage inventory and traffic operations. Michael Barrett will run all ad sales for the company, and Brendan Condon will become the division's senior vice president of finance and administration.

Lebow, Barrett and Condon will report to Kelly, and Kelly will report to AOL Vice Chairman Ted Leonsis.

The changes in AOL's ad sales leadership come at a critical time for the Internet giant. Once a leader in attracting online ad dollars, AOL has been rebuilding its ad business in the aftermath of the dot-com crash and trying to mend its poor reputation in the advertising community.

Last quarter, AOL's advertising revenue plunged 33 percent from the previous year, to $178 million, but remained flat from the prior quarter. Time Warner executives said new advertising and paid-search deals are helping the company stabilize this business.

On top of that, AOL has been facing significant subscriber declines over the past 12 months, culminating in the loss of 688,000 customers last quarter. Time Warner is also under investigation by the U.S. Securities and Exchange Commission and the Department of Justice for the way AOL accounted for its online advertising revenue.