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AOL Shifts Its Ad Biz, Bundles with HP

It’s been many years since America Online represented perhaps the world’s largest online service and gateway to the Internet, but the folks currently running AOL don’t want you to count them out just yet. Today, AOL made a series of significant strategic announcements that have the company bundling toolbar and portal software with Hewlett-Packard PCs, launching a mammoth new Internet advertising business under the monicker “Platform A,” and—reflecting its new ad-centric focus—relocating its corporate headquarters from Virginia to the heart of the advertising world, New York City.

“With these changes, Randy Falco, Ron Grant, and their team have positioned AOL to benefit fully from the trends that are reshaping the online advertising business and to expand AOL’s leadership in it,” said Time Warner president and CEO Jeff Bewkes, in a statement.

First up, AOL is partnering with Hewlett-Packard (which has recently outpaced Dell for the top spot amongst computer makers) to bundle co-branded versions of AOL’s portal, toolbar, and search software as defaults on new HP desktop and notebook PCs. Under the agreement, AOL will be set as the default home page on new HP systems, and a co-branded toolbar and Internet search feature will be default setting on PCs shipped internationally. AOL was already the default home page on HP systems shipped in the U.S.; the new agreement extends that relationship to additional countries, for which AOL will provide localized portals and toolbars. Financial terms of the deal weren’t disclosed.

Next, AOL has announced a new business entity its dubbing “Platform A,” which will front AOL’s online advertising and measurement efforts. By combining the reach of behavioral advertising technology from recent acquisition Tacoda, AOL’s existing property advertising.com, along with Lightningcast, Adtech, and Third Screen Media, AOL says it’s capable of reaching more than 90 percent of the U.S. online audience. Industry watchers see the move as critical to AOL’s survival as it completes its conversion from a walled-garden online community to a globe-spanning, ad-supported Web company—although AOL certainly faces substantial competition from entrenched giants like Google, Yahoo, and Microsoft.

AOL is also moving its corporate headquarters to 77- Broadway in New York City, where the company has been leasing office space. Although the company will continue to maintain significant presences in Dulles, Virginia, and Mountain View, California, AOL Chairman and CEO RAndy Falco put it bluntly: “New York City is the center of advertising, so it makes perfect sense to locate our corporate headquarters here.”

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