Google's man takes over at AOL

Tim Armstrong, a senior vice-president at Google, is taking over as chairman and chief executive of AOL, after the long beleaguered company decided to shake up its top management.

Armstrong replaces Randy Falco. Additionally, AOL's chief operating officer Ron Grant will also leave as a result of Armstrong's appointment.

In a statement, Jeff Bewkes - the chairman and chief executive of AOL's parent company, Time Warner - said in a statement, 'Tim is the right executive to move AOL into the next phase of its evolution. At Google, Armstrong helped build one of the most successful media teams in the history of the internet. He's an advertising pioneer with a stellar reputation and a proven track record.'

Armstrong has a lot to do. His predecessor Falco presided over a 50% drop in revenues since the beginning of his tenure in November 2006, despite spending hundreds of millions of dollars on new businesses such as Bebo.

Additionally, the company has started laying off thousands of workers as part of a plan to purge 10% of its global workforce.

The move also threatens to mark a significant change in the terrain of the web industry. Over the past year there has been increasing speculation that other internet companies, including Yahoo and Microsoft, were considering a deal with AOL to buy all or part of its business.

But one expert said that this could drag the company further away from such a deal. Not only does Armstrong have a background with Google, but the Californian internet company has a 5% stake in AOL, which it bought for $1bn (£718m) in 2005.

Last month Google exercised a clause in its contract with AOL, which means that it either has to spin off from its parent company Time Warner, or it would be forced to buy back the stake.

'Armstrong's likely to be Google-friendly,' said Danny Sullivan, editor of the SearchEngineLand website.

'Of course, I'd expect Armstrong to act in AOL's best interests, not Google "&brkbar; but it certainly does give them a much closer connection to AOL than either Yahoo or Microsoft will have.