Thanks To A $90 Million Acquisition, Tim Armstrong's College Roommate Just Got A Big New Job At AOL

AOL CEO Tim Armstrong has known Luke Beatty a long time.

First they were college roommates. Then they lived together for a time after school. Then, decades later, they founded a media company together: Associated Content.

When Armstrong became AOL CEO in 2009, the plan was for Beatty to join too.

Armstrong was going to have AOL buy Associated Content. But the deal got squashed by Time Warner, which still owned AOL.

So, in a saved-by-the-bell deal orchestrated by investor Ron Conway, Associated Content went to Yahoo for $90 million. Beatty became a VP for the AOL rival instead.

Then, last summer, the pair finally reunited.

Beatty came to AOL with a mission from Armstrong: get the most out of AOL's outside partnership.

Over the next few months, Beatty found a company he really liked working with. It's called Gravity. It helps publishers deliver "personalized" content and ads to Web users. Clients include NBC Universal, Disney, Sony, and Intel.

Beatty liked working with Gravity so much that he convinced Armstrong to spend $90 million to buy the company for AOL.

AOL announced the deal this morning.

In an email, an AOL spokesperson says the deal means:

• Using Gravity, AOL's brands will offer a more tailored experience for users thereby boosting engagement across our sites

• Gravity's vast library of highly-targeted data will allow our advertising clients to more efficiently reach their audiences

• AOL will now be able to spread the Gravity technology across the Internet through its leading network of publishing partners - including within our video business

The deal also means Beatty has a new job.

Recode's Kara Swisher reports that after the acquisition is complete, Gravity's 40-person team will report to Beatty. Beatty's new title is "Head of Product, AOL Brand Group."

His new boss, CEO of AOL Brand Group Susan Lyne, wrote a memo about it.

Swisher got a copy:

Dear Team,

Over the last few months, we've thought long and hard about the best way to create a more product-driven culture, one that respects brand-centric teams while driving an ambitious product roadmap for the Brand Group as a whole. Org design is an important element of this but we all know that success starts with a strong leader - and to that end I am very happy to announce that Luke Beatty has been named Head of Product, AOL Brand Group, effective immediately.

This is a new role within the BG and it allows us to consolidate a number of network-wide product initiatives under Luke's leadership: content that will power our 2014 distribution goals; a contributor platform inspired by the Lifestyle team's successful contributor network; new content platforms like Mini, which launched at CES last week; development of new content management systems; and personalization of our content offerings. There are many interlocking dependencies here that will benefit from common goals, increased communication, and a clear reporting structure, with James Commons, Peter Rojas, Ryan Block, Oscar Kafati, and Joel Burns all reporting to Luke.

Additionally, Mike Manos and his team of engineers will now report to Luke. Mike's team joined the Brand Group last year when engineering resources were transferred to the businesses they served. About half of the group went directly to Mapquest, Search, and Aol.com - businesses whose scale and unique characteristics required autonomous product/engineering teams; the rest remain in Mike's org today, including the desktop and mobile teams that support the rest of our brands, the AMP team, Quality Assurance, Testing, and the Development Labs team. Mike and Luke have spent a lot of time talking through options for fielding the tech organization more efficiently and effectively and I know they are both excited about the opportunities ahead.

I believe, as do Luke, Tim Lemmon, and Mike Manos, that brand teams need to work as integrated units and, to that end, brand Product Managers will continue to report to their GMs. However, they will also dotted line report into Luke to insure that product roadmaps are aligned, engineering resources are deployed effectively and that, where it makes sense, development work is leveraged across brands. Luke will be sending out a note to the groups that will report directly to him, and also to the product and engineering teams that will dot into him. Luke himself will report to me for all consumer-facing products (e.g. Reader, Mini) and to Tim Lemmon for platforms that support the Brand Group and AOL, Inc.

This is a big year for us. As Tim Armstrong said in his New Year's Eve email, we are entering 2014 off a very solid 2013 where we delivered our first full-year of growth in eight years. That's a huge achievement. But to reach the goal Tim set for 2014 - to go from being a company that is growing to a growth company - we need to commit to accelerated product development and product excellence. I'm confident that Luke's appointment is a giant step in that direction.

Please join me in congratulating Luke!

Susan