Falco and Grant were almost instantly hated when they arrived at AOL's Dulles campus — partly because Time Warner CEO Jeff Bewkes badly mishandled the exit of former CEO Jonathan Miller. (Miller is now a venture capitalist, and both his name and Armstrong's came up as candidates in Yahoo's CEO search.)

Armstrong, head of Google's North American ad sales, seems like the best possible man for the job — and with Google's shares hovering around $323, down more than 50 percent from their peak, and AOL at the nadir of its tumultuous existence, it seems like a good time for him to prove what he can do.

He benefits from an easy comparison: Falco's reign at AOL, where the company's notional value sank from $20 billion to a fraction of that, will go down in history as one of the worst reigns as CEO at any company, anywhere.

But what is Armstrong going to do? He'd never have left his cozy perch at Google to oversee AOL's further decline. Let's assume that's not in the cards.

The best indicator of Armstrong's preferred strategy is not the one he pursued at Google. Based primarily in New York, Armstrong oversaw an agenda set by the geeks in Mountain View. To keep him on board, Google's top managers allowed Armstrong use his Google-IPO wealth to make several startup investments on the side, even when they posed a conflict of interest.

One company, Associated Content, run by Armstrong's college roommate Luke Beatty, lets amateur publishers post content on the Web and get paid a share of the advertising revenues. Another, Patch, is building local news sites with real journalists behind them, in competition with the New York Times.

It's not clear if Time Warner, which is stricter about this kind of thing, will let Armstrong stay involved with his side gigs. But what they spell out is a guy who's itching to be a media kingpin, not the boss of an army of programmers.

What that likely means: The future of AOL will rest in its blog-heavy MediaGlow division, while Armstrong works his Madison Avenue connections to rebuild AOL's slouching ad sales. If he makes it work, it will be a triumph over his old bosses at Google — the ones who believe in the alchemy of algorithms over the hard work of creating content that attracts an audience.

Candidates for the job who currently work at Microsoft include SVP Yusuf Mehdi, once Microsoft's online chief; Brian McAndrews, the former CEO of Microsoft-acquired aQuantive; SVP Satya Nadella, who runs search engineering, among other responsibilities; and Bill Gates's replacement as chief software architect, Ray Ozzie.

"Yusuf is not an operator and Satya is a possibility but would be a stretch," a source tell us. "I would bet on Brian McAndrews. But McAndrews might not want it as he made serious bank with the sale of aQuantive and may not want to do more than he has to finish his earn out. I mean, what’s the marginal upside for him?"

As for Ozzie, Kara Swisher quotes all kinds of Microsoft developers who hope he'd take the job,but another source tells us: "I think he's got the gig he wants: basically, being a visionary. And he's great at it."

One problem with Ozzie, says our source: "Only thing I've heard so far is [the candidates are] not internal." So scratch Ozzie and the rest off the list!

"My guess is they'd want to poach from Google, for appearance's sake," says our source. He suggested we take a look at ex-Microsoft employee, Mark Lucovsky — head of Google's search APIs. The problem with Lucovsky is that Microsoft CEO Steve Ballmer might not want to take him back — he reportedly threw a chair when he heard Lucovsky was leaving Microsoft for Google in 2005.

Swisher's Microsoft sources also nominated former Yahoo COO Dan Rosensweig for the job, but a source says: "Dan would never do it given loyalty to Yahoo."

So who's it going to be? The people we talked to gave us the usual boring non-answers — "I imagine Microsoft might take a little time to really look around. There is no massive rush." So we'll suggest another scenario: Why doesn't Microsoft pull a Sandberg?

Sheryl Sandberg was a relatively obscure VP at Google, but she had an important job — overseeing the automated systems that pulled in Google's billions of dollars in advertising revenues.

Our guess: Someone from AOL, possibly Lynda Clarizio, boss of AOL's Platform-A advertising division. Microsoft seems eager to buy AOL —AOL dealmakers met with Microsoft in Seattle last week, and yesterday, AOL started cutting costs in an effort to pretty itself up for a sale — and Clarizio would probably be the top executive to come over in the deal.

AOL CEO Randy Falco wants to get a Hollywood job at Time Warner after putting in his time at AOL. His henchman, Ron Grant, has lost favor of late. Is Clarizio too salesy for the top online job at Microsoft? Probably, but then, there is evidence Microsoft CEO Steve Ballmer might not mind.

(Photo by adpowers)

Bewkes has been trying, on and off, to swap AOL and a fistful of cash for a 20 percent stake in Yahoo, which would help CEO Jerry Yang fend off both Microsoft and Carl Icahn. Yahoo executives aren't particularly interested in having AOL's aging Internet assets dumped on them to manage — but they were eager to buy Bebo, particularly Yahoo Europe head Toby Coppel. Yahoo has a deal to sell ads on Bebo in Europe, a deal that most expect AOL to do away with after it expires. Buying Bebo serves to makes AOL more attractive to Yahoo — and if that gets AOL off Time Warner's back, then it may be $850 million well spent.

With its takeover of Time Warner Inc. imminent, AOL sought to maintain its breakneck growth in advertising and commerce revenue. AOL converted legal disputes into ad deals. It negotiated a shift in revenue from one division to another, bolstering its online business. It sold ads on behalf of online auction giant eBay Inc., booking the sale of eBay's ads as AOL's own revenue. AOL bartered ads for computer equipment in a deal with Sun Microsystems Inc. AOL counted stock rights as ad and commerce revenue in a deal with a Las Vegas firm called PurchasePro.com Inc.

None of the eight of the executives charged today remain with the company, now named Time Warner. Two of Colburn's most diligent henchmen, however, still do. Ron Grant, as AOL's COO, is reassembling a central dealmaking group akin to Colburn's business-affairs unit. Grant and Lynda Clarizio, the new head of AOL's advertising-sales group, Platform A, were recently praised by former executive Myer Berlow for having been "trained in Business Affairs." Some remember Berlow as being part of the problem.

One possible explanation: Viebranz's immediate superior, AOL chief operating officer Ron Grant, is vulnerable under the new Time Warner regime of Jeff Bewkes, who took over as chief exec of the media conglomerate at the start of the year; Grant's intelligence may have won him a moniker, the "human computer", but Bewkes is thought not to rate his management ability. The bloody dismissal of Viebranz is not necessarily a sign of Grant's strength; but his weakness.

Some insiders doubt this, expecting Falco to retire instead and saying it's premature to speculate on Viebranz's future. Certainly, Falco and Viebranz have plenty of opportunities to screw up and nix these moves. But I'm most fascinated by the man who's left out in the cold in any scenario being whispered: Ron Grant, AOL's COO and Falco's so-called "human computer." Apparently Time Warner management views him as fit for number-crunching and payroll-slashing, not actual leadership material.

Falco and Grant, of course, run AOL in name only. Chaos and rumor are really the ones in charge. Having misjudged the extent to which they need to slash AOL's payroll, Falco and Grant may be preparing to follow tomorrow's widely expected layoffs with another round in December.

Not out of mercy, as Silicon Alley Insider seems to suggest, but out of sheer disorganization. Some departments, in the midst of one of the Internet giant's permanent-seeming reorganizations, have pleaded for more time in figuring out where to cut staff. Programming is one area on the bubble; despite the edge AOL has built in developing original content like the Live 8 concerts, largely under prior programming chief Kevin Conroy, some say that under the new regime, with Bill Wilson in charge, the department will be put on "maintenance mode."

Relatively safe — for now, at any rate:

• Advertising sales Save for some rationalization as Advertising.com, Tacoda, and other groups get merged into the new Platform A unit, this area's seen as a strength for AOL.
  
• Products Email will get more attention.
  
• Recent acquisitions AOL's collected a number of interesting startups like Truveo in video search and Userplane in widgets, but it hasn't done much with them. Expect that to change.

That's the good news, small as it is. The bad news? Uncertainty and fear, the true bosses of AOL, will continue to reign until December.

Whatever the case, we salute you, Lance. Most human-resources chiefs are faceless bureaucrats content to implement whatever hiring or firing plans are handed to them. By standing up both your overworked team of HR workers, who are struggling just to put together severance packages for all of AOL's planned firings, as well as all for all of AOL's employees, you've made yourself a hero.

Yes, I'd argue. If only because it's a case study in the promise and perils of being on the edge of things. In the '80s and '90s, being an outsider and underdog helped AOL, as Kara Swisher chronicled in her book aol.com.. The conventional wisdom was that America Online would fail. And yet, time and again, it succeeded — because, isolated from the rest of the tech industry, the voices of AOL's customers rang louder in employees' ears. Hearing them out was the company's secret weapon against Microsoft and the rest.

Somewhere along the road, though, AOL stopped listening. Hubris? A lot of that, for sure. Was it the merger with Time Warner? Admittedly, a distraction. The inevitable decline of the dial-up business? When you start thinking of your customers as cash flow, paying attention to their wants and needs is just another cost center.

That AOL is reorganizing all of its online-advertising units into a new business, Platform A, and moving its headquarters to New York suggests that the customer it wants to listen to these days is Madison Avenue. Rumors that AOL may make large cuts in its programming and products divisions suggest that users are not at the top of the priority list.

I'm not going to ding a capitalist enterprise for bending its ears towards the jingle of money. But from what I've gathered, there's not a lot of listening going on in AOL's Dulles headquarters. Or talking. Let's change that, shall we?

Your bosses may not be talking to you, AOL employees, but I'm all ears. Family business, fortuitously, has brought me to your neighborhood. (Or is my cousin's bar mitzvah just a cover story? I'll let you decide.) I'm a quick drive down the Dulles Toll Road. Let's get coffee. Drop me a line.

You probably can't use this since I can't supply you with the video feed, but yesterday in AOL's Management Summit, while defending his choice of copying Yahoo's portal, Grant suggested that we "invented the left nav" and many other web standards, so that, in essence, we aren't copying, since we innovated these things in it the first place.

Furthermore, he insisted that there are "standards" that everyone uses that are best for the consumers, but overall dodged the question with execuspeak, never taking true accountability and owning up to it. He did also mention that the Beta site is in an evolutionary stage and that it will evolve as new features are added. Sounds to me like changes will be made to the design to cover it up.

In a memo sent out today, he instructed employees that "As much as possible, you're encouraged to make it an e-mail-free, long holiday weekend."

What a nice gesture! Or is it? Employees see it as an omen of things to come.

Our tipster reports:

I work at AOL, and we just got a memo from Ron Grant... he invited everyone to take "a long, email-free holiday weekend", which those of us who are afraid of the safety of our jobs (so everyone) read as "Stay off the internet for a couple of days. We wouldn't want you to hear about the downsizing of your department until after Christmas." Also, I'm still asking around, but I can't find anyone who got a holiday bonus.

Ho ho ho!

Full email after the jump.

Subject: A Head Start On the Holidays

Dear AOL Colleague:

With the holidays now so close, and many already getting on the road to see family and friends, all employees, except those deemed "essential personnel," should feel free to finish up your work early on Friday, December 22, and get a head start on enjoying time away at about noon in your respective locations. As much as possible, you're encouraged to make it an e-mail-free, long holiday weekend. Our thanks this time of year go especially to those personnel who keep AOL services humming 24/7, even through the holidays. And to everyone, best wishes for a happy and safe holiday season.

Ron Grant