AOL will make some of its ad-banner space and partner sites' inventory up for bid in an online auction. Advertisers will be able to make cost-per-impression, cost-per-click, and cost-per-action bids. The good news for advertisers looking for cheaper alternatives in a tough economy — such as General Motors, which just announced it plans to cut online ad spending — is that the process will remove costly "friction" from the ad-buying process. The bad news for publishers: "Friction" is another word for "profit." Another concern: Allowing advertisers to buy space on their sites through ad networks will discourage them from developing relationshps with their highly paid salespeople.

When PaidContent reached Platform-A boss Lynda Clarizio on the train home from work, she said AOL only made the move to rationalize the division's contracts with publishers. After the integration, Tacoda's behavioral-targeting tech will be Platform-A's behavioral targeting tech. A single contract will let AOL fill ads spots it can't sell via Tacoda with Advertising.com's remnant ads, but CPM rates should stay the same, Clarizio said. Clarizio and other Advertising.com insiders opposed the Tacoda acquisition, believing their behavioral-targeting technology could command a similar lift in ad rates, so there's some pride-swallowing being done here. But the ouster of Tacoda's executives and the neutron-bomb elimination of two-thirds of its staff should salve that wound.

Since we made the guess that Clarizio might be the a candidate to take charge of Microsoft's online division, insiders have laughed it off. Clarizio's a lawyer by training, they note — the ultimate diss in the tech world. But if this kind of inwardly directed knife-sharpening isn't what's called for in Redmond, we don't know what is.

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)

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.

Probably not. For one thing, brokering ads, while trendy right now, is a lower-margin business than selling ads on a website a publisher owns. AOL will have to split any profit with Verizon. And Verizon's inventory, like AOL's, is likely heavy on pageviews from Web-based email and other low-value traffic.

Tacoda, the company whose acquisition brought Viebranz to AOL, had promised to boost significantly the value of ads on those pages. Executives at AOL's Advertising.com unit, including Clarizio, were skeptical of Tacoda's claims, and opposed the acquisition. After Viebranz's ouster, Clarizio now has to prove what insiders at Advertising.com argued: They could do a better job than Tacoda at making money from those ads.