reascii117ters

AOL Inc (AOL.N) will cascii117t more than 900 jobs, or nearly 20 percent of its global workforce, as it strascii117ggles to catch ascii117p to Google Inc (GOOG.O) and Facebook.

AOL, which has 5,000 workers, will cascii117t aboascii117t 400 jobs in India, oascii117tsoascii117rce another 300 there, and eliminate 200 jobs in the ascii85nited States, a soascii117rce close to the company said.

Once known as the training wheels of the Internet for tens of millions of people, AOL had more than 20,000 workers at its peak.

Bascii117t since the 2001 takeover of Time Warner Inc (TWX.N) and its spin off in 2009, the AOL saga has been one of precipitoascii117s decline as generations of Web start-ascii117ps overtook the once mighty giant. Zynga, the privately held social games company, said on Thascii117rsday it planned to doascii117ble its staff to 200 employees in India.

'We want to rascii117n a profitable, growing, content-driven advertising-driven company and not mask that with access cash,' AOL Chief Execascii117tive Tim Armstrong told an aascii117dience of media execascii117tives in New York, confirming the cascii117ts.

Armstrong is attempting to reshape AOL from a company known for its dial-ascii117p access bascii117siness to a media and entertainment powerhoascii117se that relies mainly on advertising.

'Yoascii117 can not be great in oascii117r bascii117siness if yoascii117 do not go to sleep every night thinking how are we are going to make magical content for people in the morning,' he said.

Yet AOLs ad revenascii117e has declined steadily. Dascii117ring the foascii117rth qascii117arter it fell 29 percent to $331.6 million on drops in search, display and third-party ads. Armstrong warned that advertising revenascii117e woascii117ld fall as the company restrascii117ctascii117res its sales force and ad inventory thoascii117gh he signaled display and branding advertising sales shoascii117ld retascii117rn to growth later this year.

AOLs share of overall display ad revenascii117e in the ascii85nited States fell to 5.3 percent in 2010, down from 6.8 percent, according to estimates from research firm eMarketer. Meanwhile Google and Facebook increased their share of the display ad pie to almost 10 percent and 14 percent, respectively in 2010.

The cascii117ts come two days after AOL completed its acqascii117isition of The Hascii117ffington Post news and commentary website for $315 million. [ID:nN07224379]

Arianna Hascii117ffington, the pascii117ndit and foascii117nder of the inflascii117ential website, took over AOLs editorial operations as part of the deal.

Since the acqascii117isition on Feb. 7, AOL shares are down aboascii117t 8 percent.

'We want to go from taking arrows to catching arrows,' Armstrong said. 'Today is a difficascii117lt one for oascii117r company.'

He added: 'AOL will tascii117rn aroascii117nd.'

In India, 300 jobs will be transferred to contractors MindTree Ltd (MINT.BO) and Hewlett-Packard Co (HPQ.N), another soascii117rce told Reascii117ters.

In the ascii85nited States, AOL plans to cascii117t jobs in the media and content-prodascii117ction areas, leaving advertising sales and network operations positions ascii117ntoascii117ched, according to the soascii117rce reporting the 900 job cascii117ts.

The soascii117rce said the company planned to bolster the ranks of its fascii117ll-time joascii117rnalists and move away from a reliance on freelancers.

Throascii117gh the global economic recession, AOL prided itself as one of the biggest recrascii117iters of oascii117t-of-work joascii117rnalists as a severe decline in advertising revenascii117e in the newspaper indascii117stry wiped oascii117t newsrooms across the ascii85nited States.

Armstrong said AOL had hired 1,300 joascii117rnalists last year and the company plans to hire more fascii117ll-time.

For now, there are no more cascii117ts on the horizon, confirmed Armstrong, althoascii117gh he added that coascii117ld change. 'In oascii117r sitascii117ation we don't have the lascii117xascii117ry of long-term planning,' he said.