Memo to AOL’s Miller: You’ve Got… A Very Difficult Job

If every cloud has a silver lining, is the reverse also true? It is for Jonathan F. Miller. On Tuesday, he landed what once would have been — and might still be — one of the world’s great jobs. He now heads America Online.

Not a bad gig. He certainly won’t have to go into any strained explanations at cocktail parties about what he does for a living. No doubt he’s being rewarded handsomely as well, since any potential hire would have to be persuaded with some pretty enticing carrots, given all that awaits him.

So the good news is that Miller has a great job. The bad news is that he’s almost certainly doomed to fail.

Growth Hormone

The problem, as usual, is expectations. This time, the expectation is that somehow, some way, AOL can become a growth machine again.

Of course, AOL, like many Internet businesses, was a growth story for a long, long time. Remember? The press releases were issued every few weeks, it seemed, whenever AOL membership passed another milestone: 10 million, 15 million, 20 million and so on. It now stands at about 35 million.

But just ask any dot-com refugee about that growth thing, which has a funny way of coming to an end. In fact, it’s an immutable law of nature. You can only grow so much. There’s no reason to believe, in other words, that every living human being will sign up for AOL, although that seemed to be the way things were heading at one point.

But slower membership growth has long been expected and factored in. And so has slower advertising growth.

Expectation Negotiation

One analyst said that Miller’s first job will be to get expectations under control. But that’s a bit like putting the horse back into a barn that has just burned down. AOL has already underwhelmed investors so many times that lowering expectations is all but impossible.

Everyone is hoping that the bottom has been established for AOL and that it’s all uphill from here. A new person does have advantages: He didn’t set up the systems and processes that are already in place when he arrives, so it will be a lot easier for him to recommend dismantling them if they don’t work.

His mission will be not only to make AOL perform more effectively, but to do what others couldn’t: convince more AOL users to go broadband. That means convincing them to spend more in a stomach-churner of an economy.

Messy Office

Miller also will need to get customers to give more money to AOL, or at least to spend on AOL in larger amounts. AOL has long touted how much time its users spend online. Does Miller have a magic wand to wave that will make them spend more?

His experience with USA Interactive is certainly a plus in that area. But the process is going to be a long one, an evolution rather than a revolution. Does anyone have the patience for that?

Well, it’s hard to have patience when your company’s share price is below $10. It’s hard to have patience when the SEC, the Justice Department and every reporter with an empty notebook is asking about your firm’s accounting practices.

While it’s still early on the accounting issues, the chances seem decent — given just how fast and loose everyone played in the dot-com daze — that something bad willturn up somewhere.

Distraction Computation

If it turns out that AOL cooked its books in some way, Miller will have to deal with it. At the very least, he’ll have to wash his hands of it publicly, blame it on the previous administrations and try to focus on moving forward.

He is sure to come up against some pretty tough obstacles. There’s no way around the fact that this cloud might be more darkness than silver lining.

What do you think? Let’s talk about it.