AOL ex-CEO looks beyond Google, Microsoft & Yahoo

By Kenneth Li

NEW YORK (Reuters) - Former AOL Chief Executive Jonathan Miller has joined online advertising company OpenX as chairman, banking on room in the industry for smaller players even as it consolidates around big deals like Microsoft Corp's (MSFT.O) bid for Yahoo Inc (YHOO.O).

Miller, who helped lay the groundwork to transform AOL from a dial-up Internet service to one focused on advertising, takes charge of OpenX as it faces a strengthened competitor in DoubleClick, which will soon be part of Google Inc (GOOG.O).

OpenX, formerly Openads, gives away free software to let Web publishers control when, where and how ads are served on their Web sites. DoubleClick offers a similar service, but charges a fee for its software.

OpenX makes money from charging ad networks to plug into its community of more than 30,000 Web site publishers in more than 100 countries. In January, it test-launched an ad server hosting service that stores ads that can be served to clients when they are needed.

Like other small advertising companies, not to mention Microsoft and Yahoo, OpenX seeks to chip away at a $40 billion Web advertising market now dominated by Google.

Miller sees Microsoft's $42 billion bid for Yahoo as "a battle among the titans" that will herald more consolidation and a new era for ad companies.

"The titans are doing fine, but there's a whole new generation. I believe Openads is one of those," he told Reuters in a phone interview.

The former CEO and chairman of AOL helped restructure the once-reigning king of the online world, paving the way toward Time Warner Inc's (TWX.N) plans to split up AOL.

AOL has held exploratory talks to combine with Yahoo or News Corp NWSa.N, sources have said. Miller declined comment on his former company.

Regarding Microsoft's Yahoo bid, Miller said he expected the deal to be consummated eventually, even though Yahoo Chief Executive Jerry Yang has rejected the software giant's offer.

"I think Jerry is trying really hard for an alternative. It's sincere. There were extensive meetings in Palo Alto with News Corp," Miller said.

Like many Wall Street analysts, he thinks it would be tough for Yahoo to find a deal that can offer as rich a premium to shareholders as Microsoft's bid. "It's too complicated to get done," Miller said of an alternative deal from News Corp.

BIGGER, SMALLER GET BIGGER

The London-based OpenX is backed by financiers including Skype investors Index Ventures and Facebook investor Accel Partners, which have invested about $20.5 million to date.

Its technology has been in development since 1999 as an open source project, where developers can copy, modify and redistribute the software. Openads was formed as an independent company in 2007.