"My concern is they start neglecting content for their ad-related business," said Jeff Ratner, managing partner and digital director at WPP's MindShare Interaction. "If Moviefone and TMZ become second-rate, then what are we actually buying?"

Like previous purges in recent years, the layoffs are intended to further shift resources away from AOL's sinking subscription service and toward its ad-related businesses.

"This realignment will allow us to increase investment in high-growth areas of the company--as an example, we added hundreds of people this year through acquisitions--while scaling back in areas with less growth potential or those that aren't core to our business," Randy Falco, AOL's chief executive, told employees Monday.

Continued layoffs related to the jettisoning of AOL's dial-up business mean little to Madison Avenue, according to eMarketer Senior Analyst David Hallerman.

"Everyone's been expecting more of this, and generally applauding the transition," Hallerman said. "It's largely background noise at this point."

"This is more fallout from the old model," said Ed Montes, executive vice president and managing director at Havas' Media Contacts.

Last month, AOL consolidated its ad networks--including Advertising.com and Tacoda--into a single division named Platform A. It also announced plans to move its headquarters from Dulles, Va.--where its subscription business rose and fell--to New York City.

Rumors abound that the salespeople presently overseeing inventory across AOL.com will soon be folded into Platform A, which is now run by the former head of Tacoda, Curtis Viebranz.

Montes, for one, doesn't see this as a bad thing. "I wouldn't see this as a de-emphasis on the portal; it would be more of a focus on integration and using the whole platform."

Falco's vision of the future seems to be clear. "My vision for AOL," he told employees on Monday, "is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience."

But, in the scramble to shift business models, there is the danger of unintended consequence. Another concern for MindShare's Ratner is that the layoffs could eventually impact the technology running AOL's sites.

"The impact wouldn't be felt immediately," said Ratner, "but if AOL's investing less in areas like technology, it could affect the quality of the sites."

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