AOL's Move Is The Talk Of Dulles

AOL chief executive Randy Falco e-mailed employees yesterday to tell them the company would be moving its headquarters to New York. "I know this change raises questions for many of you, not all of which I can answer here," he wrote. "Suffice it to say that for most of you, this won't affect your jobs at all."

Though AOL said that most of its 4,000 employees would remain in Dulles, local technology executives and economic development officials suggested that the move could set off a flight of talent from AOL and that the region might lose some of its shine as a tech center.

"This is a loss for our region and there is no way to sugarcoat it," said Bobbie Kilberg, president and chief executive of the Northern Virginia Technology Council.

"It may not be that many jobs lost now but over the long term you can't help but wonder whether they will lose more people from the Dulles campus. That's inevitable when you take the leadership and you put the leadership in New York City. You have to question the direction of the employees left in Dulles."

Dorri O'Brien Morin, spokeswoman for the Loudoun County department of economic development, said she was reassured that AOL executives said its presence was here to stay. "It's not pleasant to lose a headquarter designation," she said. "But we still have the most important thing: 4,000 jobs, 4,000 high-paying jobs."

Jay Rappaport, the president of online widget maker Clearspring and the former chief operating officer for AOL's Internet access service, noted that AOL alumni have already gone on to join or start Internet startups in the region and predicted the headquarters shift might encourage more of that. "It may unleash a lot of talent here within the AOL corridors," he said.

But other former employees argued that AOL's decision means the last big Internet company is leaving the Washington region. When he came to Washington from Silicon Valley in 1999 to serve as AOL's chief technology officer, William Raduchel said he saw Washington as an Internet leader. There was not just AOL, but Network Solutions and telecom companies MCI and Nextel. Today, he said, "if you look for Internet firms, you look to Silicon Valley," adding: "All of the leadership companies are now gone."

Raduchel warns the move could have a lasting, negative impact on the local tech community. "You lose executives that came down and were part of the Washington community," he said. "For the Washington area, when you lose the corporate headquarters, it has long term pervasive effects as opposed to cataclysmic effects."

AOL employees did not appear alarmed by the announcement. One AOL employee, who works in online advertising for the mid-Atlantic region, observed that some non-employees misreading Falco's memo about the relocation. "Outsiders skimmed it and think the whole company is moving to New York," he said. "Insiders know that much isn't going to change."

"I haven't sensed a lot of stress about it," the employee said.

One Loudoun business that caters to AOL employees said it had reason for worry. "That's gonna kill the area," sighed Doug Hisel, manager of Old Dominion Brewpub, one of the hang outs for techies and government contractors, in Ashburn.

Anthony Pappas, who has started a marketing firm in Tysons Corner geared toward technology companies, was troubled by the announcement. "It's a little rough for us companies that are trying to build that New York attitude here," he said.

Other business leaders said they were not concerned about the announcement. Since the heyday of the dotcom era, they said, the local economy has grown increasingly diversified -- even within the technology sector -- making it easier to absorb a big announcement like AOL's.

"This absolutely is not the end of the technology community in Washington," said local technology entrepreneur Mark D. Ein. 'It's been many years since AOL was the central engine of growth of the Washington technology community. The local technology community is diversified across technology industries, across company size, across stage of company development and there is no single company that is going to single-handedly change the course of the region's technology industry."

"It is a sad day for the region, but we are not a one-company or one-industry town," said Raul Fernandez, chairman of Reston-based ObjectVideo. "The good news is that there is a diverse employment base in the region and a lot of innovative companies looking for experienced talent."

Jerry Gordon, president of the Fairfax Economic Development Authority, noted the recent announcement that Volkswagen of America would move its headquarters to Herndon from Auburn Hills, Mich. That "gives us reach into a different industry," he said. "If you look at communities that are not sufficiently diversified, their fortunes rise and fall with their companies."

--By Zachary A. Goldfarb and Kendra Marr, with contributions from staff writer Thomas Heath and washingtonpost.com blogger Tammi Marcoullie.

By Dan Beyers  |  September 17, 2007; 8:09 PM ET  | Category:  AOL
Previous: Monday Briefing 09.17.07 | Next: Early briefing 09.18.07: AOL Goes To NY

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