• by Laurie Sullivan  @lauriesullivan, March 12, 2009

Time Warner's AOL division Thursday said it has appointed Google executive Tim Armstrong as chairman and CEO to breathe new life into the Internet unit.

AOL's former CEO Randy Falco, an ex-NBC executive, and Ron Grant, ex-COO, will both leave the company when the transition concludes. Falco took the top job at AOL in late 2006, replacing Jonathan Miller.

"Tim is the right executive to move AOL into the next phase of its evolution," said Time Warner CEO Jeff Bewkes in a statement. Armstrong, a senior vice president at Google in charge of sales, will take over the top post at AOL immediately, the company said.

AOL has struggled to rebuild its brand for years. Time Warner has focused on developing AOL's advertising business, but Armstrong will focus on getting the business ready to spin off from Time Warner as a stand-alone business or merged with another search engine such as Google, Microsoft, or Yahoo.

"Clearly AOL decided they need a sales superstar and figured the chances of selling AOL to Google with Tim at the helm go way up," said Kevin Lee, chairman and CEO at Didit, and Search Engine Marketing Professional Organization (SEMPO) chair.

Other ties between the two companies include a $1 billion investment in 2005, by Google in AOL, in exchange for a 5% stake and the ability to assist in the company's Internet search advertising in exchange for share in any revenue resulting from the move.

Armstrong served as Google's president of the Americas and senior VP, overseeing the company advertising sales in North America and Latin America. He began work at Google in 2000, and opened the first office outside of the Mountain View, Calif. headquarters.

Armstrong sits on the boards of the Interactive Advertising Bureau (IAB), the Advertising Council, and the Advertising Research Foundation, and is a trustee at Connecticut College and Lawrence Academy.