CFO of AOL exits for private equity

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NEW YORK -- Steve Swad, the CFO of AOL, will join a private-equity firm and become the latest senior manager to leave as the Internet company tries to transform itself into an online advertising conduit.

In an internal memo obtained Friday, CEO Randy Falco said Swad will stay with the company until a replacement is in place. He described the decision as voluntary and personal.

"Steve played an instrumental role in positioning AOL as a growing Web-services business," Falco wrote Thursday. "Steve told me that having accomplished all this, he's now ready for new and different challenges."

Falco did not name the firm Swad will join.

Swad, 45, became chief financial officer in 2003 following a stint as an executive vice president at Turner Broadcasting System Inc., which like AOL is a unit of Time Warner Inc.

During his four years at AOL, Swad saw the company's paying subscribers leave in droves as more Americans upgraded to high-speed broadband connections and found satisfaction with free offerings from rivals like Yahoo Inc., Google Inc. and Microsoft Corp.'s MSN. In August, the company decided to give away AOL.com e-mail addresses and other services to draw visitors to its advertising-supported sites.

AOL lost another 2 million paying subscribers in the October-December quarter, bringing its U.S. total to 13.2 million, less than half its peak of 26.7 million in September 2002. Overall fourth-quarter revenues fell 8%, but its advertising revenues grew 49%.

Falco was hired as AOL chief executive in November, pushing out Jonathan Miller. In the wake of the shake-up, three senior executives announced plans to leave. The chairman of AOL's European operations recently retired, and the unit's chief executive left for another job.

Shares of Time Warner lost 8 cents to close at $21.57 in Friday trading on the New York Stock Exchange.
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