The IT department attempted to retrieve the memo, but the damage was done. The email contained PowerPoint and Word documents that included a script detailing how employees should be terminated and what they should be told (AdAge received a copy of the memo):

“If you would like to go home today and come back tomorrow to clean out your desk or office, you are free to do so. We would like you to meet with your manager following our meeting to transition your work. We will be communicating to your team today. Your manager will be contacting clients. We ask that you do not contact your clients to discuss this situation.”

The leftovers were to receive a pep talk:

“Let them know we are building for the future. The actions we had to take, although unfortunate, were necessary to right-size the company and … bring in the skill sets we need to effectively service our business and future client needs.”

There were also notes on how to handle the press:

“This is a tough one. Since we’re not opting to get out in front of the press, we will be left to defend. I think we may need to prepare for different contingencies depending on how they may hit us — because they will hit us. RISK assessment.”

It may be a tad late for “RISK assessment” now.

It is unclear how many people will be terminated.

Scott Garell, who is CEO of IAC Consumer Applications & Portals, will take on the role of president of Ask.com. Lanzone will be going to Venture-capital firm Redpoint Ventures.

The IAC is restructuring with the intention of making Ask the flagship brand, the report continues. Owner Barry Diller announced that the company will be spinning off four business including Ticketmaster, HSN home shopping network and a grouping of financial businesses. More management changes are anticipated in the next few weeks according to a source knowing the IAC’s plans.

Ask.com was acquired by the IAC for $1.85 billion in July of 2005.

Included in the announcements was the appointment of former Wachovia official Robert Burton as COO of its banking business. The online brokerage said the changes would affect less than 30 employees. “The business does not align with the core retail business” E*Trade stated. The restructuring is focused on “reducing balance sheet-related risk and leverage.”

The company announced today that it has sold about $3 billion in available-for-sale securities, including combination mortgage-backed securities and municipal bonds, the report continued. The sale resulted in a loss of less than $5 million according to the company.

E*Trade said it has seen “turnaround momentum” in customer behavior, as the company gains news clients, totaling $190 billion in client assets with $33 billion in cash by the end of last year.

Acting CEO R. Jarrett Lilien stated “We have taken important steps in the execution of our turnaround plan by reducing balance sheet-related risk and maintaining strong Bank capital levels.”

Softness in the economy also will likely drive more money to the Internet, which can be cheaper than other media and has a reach that is easier to measure, which is attractive to advertisers in slower times. Merrill Lynch predicts overall ad spending in the U.S. for 2008 will grow 2.3%, while the portion of that spending on the Web will increase 18%. Publicis Groupe’s ZenithOptimedia says it expects the amount spent on Internet advertising to overtake spending on radio in 2008, and spending on magazines in 2010.

Amid this transformation of the ad industry, here are five trends to watch in 2008:

• New structure: The Web has fueled marketers’ frustration with the lack of collaboration inside the ad holding companies that dominate the industry. Specifically, marketers want more cooperation between the executives who create ads for TV and newspapers and those who craft Web ads or perform less glamorous tasks such as researching consumer behavior.
 
Many advertisers complain that ad executives too often push agendas that will most help their own bottom lines and tend to favor certain types of media, such as TV. Advertisers want a “media-agnostic” approach, one that picks whatever medium is best for the ad campaign.

Some bigger marketers have taken matters into their own hands during the past year. Procter & Gamble, Dell and Johnson & Johnson each have tried — working with ad holding companies — to create new types of ad groups that blend different functions. In 2008, pressure from marketers on this issue is likely to intensify, forcing even more change in the way ad firms are structured.

• Screen wars: As advertisers find it harder to reach consumers in a fragmented media world, some are turning more often to the outdoors. Television screens are increasingly popping up in grocery and department-store aisles, elevators and even gas pumps — all blaring clips of TV programs, accompanied by ads. Walt Disney’s ESPN and CBS Corp. each have programming running on 20-inch liquid-crystal displays at pumps at gas stations around the country. Gas Station TV, which operates about 5,000 such screens in 300 cities, offers ads from marketers such as General Motors’ Chevrolet and Sony. Last year, CBS inked a deal to have its programming also air in the waiting rooms of doctors’ offices.
 
• House guest: Over the years, ad makers have tried various methods to learn about consumers, from focus groups to online polls. But many on Madison Avenue are skeptical of these methods, believing consumers don’t always share their true feelings in those types of traditional settings. So a growing number of ad agencies are expected to try a different approach: having researchers spend long periods of time with consumers to find out more about how they live.
 
Some have already tried this. When devising a new ad for J.C. Penney last year, Saatchi & Saatchi sent staffers to hang out with more than 50 women for several days. They helped the women clean their houses, carpool, cook dinner and shop. Rather than pepper them with questions, the agency employees simply observed the women’s behavior and emotions. Their research became the basis of a new ad campaign; the commercials have won praise from Madison Avenue’s creative community.

“If you want to understand how a lion hunts, you don’t go to the zoo — you go to the jungle,” said Sandy Thompson, global head of strategic planning for Saatchi, which is owned by Publicis Groupe.

• Green backlash: Corporate America latched onto environmental marketing last year, as big companies spent millions of ad dollars promoting their products and services as eco-friendly. Some people in the ad business are predicting a backlash this year from consumers who question whether companies are living up to their promises. “Marketers will be more intensely scrutinized for their green efforts — those that don’t hold up will be called out via blogs and elsewhere online, ultimately leading to consumer skepticism,” said Greg Stern, chief executive of the ad firm Butler, Shine, Stern & Partners.
 
• The antisocial movement: Privacy issues, combined with the fact that consumers have only so much free time, could damp the boom in social networking on the Web. “Nobody has 5,000 real friends,” says Tim Hanlon, senior vice president of Denuo Group, a media and advertising consulting firm owned by Publicis. “At the end of the day it just becomes one big cauldron of noise.” For marketers, he says, that will mean the sites will be much more effective as a consumer-research tool than as a venue to peddle products.

Suzanne Vranica is a writer for WSJ.com

Compliments of WSJ.com

The cuts, which begin on Tuesday, amount to about one-fifth of AOL’s global work force and are spread across operations in the United States and in Europe, where the company has sold off its Internet access businesses.

AOL plans to boost investment in higher growth areas such as advertising and new international regions, AOL Chief Executive Randy Falco said in the memo to staff.

Falco said AOL will launch in seven new countries this year and will operate in 30 countries by the end of 2008.

Some unidentified senior executives will leave as part of the restructuring.

The cuts come after AOL ratcheted down online ad growth expectations for the current year at the end of the second quarter amid a realization that marketers are increasingly relying on third-party networks to buy ad space on Web sites.

The surprise sparked another round of complaints from Wall Street analysts and investors demanding the split-off or sell-off of the unit. The company has said it has no plans to do so just yet.

The new management team led by Falco, a former NBC Universal Television Group president, has been reshaping the company to adjust to the new realities.

Since his arrival last year, AOL has bolstered its advertising operations with a slew of acquisitions that include behavioral targeting company Tacoda, video ad company Lightningcast and global ad-serving company ADTECH.

Falco has also helped oversee a rebuilding of the AOL.com site’s key channels in news, food, finance and entertainment, with a renewed focus on e-mail services and the AOL Instant Messenger.

The acquisitions, including those that occurred prior to Falco’s arrival, have added between 400 to 450 new employees, who are not expected to be cut in the current round of layoffs, one source familiar with the plans said.

In September, the company created Platform A, a new division that brings together its collection of ad divisions including Advertising.com and moved AOL’s corporate headquarters to New York to be close to advertising capital Madison Avenue.

On Monday, Falco told employees the company is now focused on three main areas, Platform A, the AOL publishing business and online access services, which continued to attract just over 10 million subscribers at the end of the second quarter.

“We’re only a year and a month into our transformation, and the turnaround has been dramatic,” Falco said in the memo. “We’re now in a position to win as an advertising-supported business.”

Kenneth Li is a reporter for Reuters

Compliments of Reuters.com