NEW YORK (CNN/Money) -
America Online's new chief executive Jonathan Miller is finishing reorganization plans for AOL Time Warner Inc.'s Internet unit, according to a published report Wednesday.
Miller also is expected to change the way the company sells advertising and cut the deal-making unit, the newspaper article said.
The reorganization is expected to include the elimination of America Online's so-called matrix structure, which required some employees to report to more than one boss, the Wall Street Journal reported, citing people familiar with the situation. AOL Time Warner is the parent company of CNNfn and CNN/Money.com.
An AOL spokesman declined comment to the Journal on Miller's plans.
The Dulles, Va.-based Internet unit is struggling with tumbling advertising revenue, slowing subscriber growth and probes into is accounting practices by the Securities and Exchange Commission and the U.S. Justice Department. AOL said last month that it may have improperly booked $49 million as advertising revenue and is scrutinizing its books for possible further errors.
Dolf DiBiasio, AOL's top corporate strategist, has been polling America Online executives about changes they would recommend, according to the report. Last week DiBiasio gave Miller, who was appointed last month, a list of recommended changes based on his interviews with executives at all levels.
A frequent complaint among America Online executives was the lack of accountability the company's matrix organization structure caused. In such a system, employees are assigned full-time to a functional organization, but can be temporarily assigned full-time or part-time to a project as well, the Journal reported.
This was the case in the Business Affairs division, which handled many advertising deals without input from the various divisions on whose behalf they were negotiating. Under the new structure, most Business Affairs employees will be assigned to a division rather than operating on their own.
America Online has also been reviewing advertising arrangements being scrutinized by federal regulators. AOL lawyers have been copying files from AOL executives' computer hard drives and files related to the inquiry, the paper reported.
Shares of AOL (AOL: Research, Estimates) slipped 56 cents to $12.09 Tuesday.
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