AOL REVAMPS ENTERPRISE UNIT

By Shannon Henry

Staff Writer

America Online's business-to-business Enterprise division is being restructured in a move that will see the unit folded under the company"s product marketing umbrella.

Mark Walsh, who started the unit last summer, said May 23 that he will stay with AOL; his title will change from senior vice president for Enterprise to senior vice president for Enterprise Ventures. Walsh will work closely with David Gang, senior vice president for product marketing and both will report to Bob Pittman, president of AOL Networks, said Wendy Goldberg, an AOL spokesperson.

"We're moving into the brand," Walsh said.

While AOL is known mostly for its consumer market, Enterprise has gone after business customers, offering online services such as World Wide Web page hosting and development, intranets, and voice over the Internet. AOL research had found that 40 percent of the company's individual customers already used their account for some business.

Goldberg said the Dulles, Va.-based company is trying to find places for Enterprise's 35 employees, some of whom will still work for Walsh. "There will be some people who will probably go," said Goldberg," though she declined to say how many people might be fired.

While Goldberg said the Enterprise division is being restructured to improve its communications with the rest of the company, analysts who follow AOL saw it as a sign that the business-to-business side of the company is not thriving.

"If it was flourishing, they would maintain its independence and increase the size," said Ulric Weil, senior technology analyst with Friedman, Billings, Ramsey & Co., Arlington, Va.

But more importantly, said Weil, the restructuring suggests that AOL management is - for the better- becoming more business-like and paying more attention to the bottom line. "I would say the whole management team is maturing," Weil said. "There are no longer signs of what [Federal Reserve Board Chairman] Alan Greenspan calls irrational exuberance."