On a rainy day shortly before Christmas, 2004, I drove out to Dulles to interview James Bankoff (WG’96). It was worth the trip.

In my work since I left Wharton as an undergrad (’88), I’ve interviewed, assessed and coached over 500 senior executives and CEO’s, so I’m pretty confident I know a sharp, interesting, talented person when I meet one. Bespectacled and down-to-earth, Jim was great fun to get to know.

Why should you care?

As a psychologist and lifelong student of business success, I find people inherently interesting. Even if you don’t, you’ll learn a lot about AOL and its evolving business model.

This month’s "Alum of the Month" installment provides a great, short case study of an evolving business at the center of the rapidly changing Internet environment. And you can catch up with news of one of your Wharton peers here in the DC community.

AJ: What jobs or projects have you undertaken since you left Wharton in ’96 that led you to your current position at AOL?

James: Since ’96, I have only worked for AOL. I’m the only person I know of in my class who has maintained a job with the same company since my summer internship in ’95. I even consulted for AOL during my second year of school, and then I joined full-time.

AJ: That’s interesting. Why do you think that is?

James: Because AOL is a growing and dynamic company. As a result, I’ve been able to continue to be challenged with multiple experiences at AOL. In fact, I don’t think I’ve had any job for more than a year here.

AJ: What else is new since your classmates last saw you?

James: I just had my first child this year. We’re really excited. Her name is Elizabeth Elson Bankoff. We call her Elson, which is my wife’s family name.

AJ: Congratulations!

James: I’m really excited to be a new father. Thank you! My wife is actually an entrepreneur. She has her own business that she owns and runs. She designs and markets high-end rugs, and works with many well-known designers, such as Oscar de la Renta,. You’ll see her ads in major furniture and interior design magazines (www.ElsonCompany.com).

AJ: Are you involved in any volunteer organizations, charities, foundations, anything like that here in the DC area?

James: I recently joined the board of directors for a non-profit organization called Network for Good. It’s the largest charitable-giving portal that helps non-profits grow by giving them online tools to facilitate their efforts. Through Network for Good (www.NetworkforGood.com) you can choose from thousands of non-profits to donate time or money, based on your interests. It also helps non-profits set up an electronic commerce engine to solicit donations from some select foundations, and gives them tools to communicate with donors.

AJ: Have there been any defining moments or learning experiences in your career that you felt were key for you?

James: Good question. I guess there’s one. I was having a good career here at AOL, and the CEO asked me to go out and manage Netscape. It sounded interesting on paper, but it was a big risk because the AOL mothership was here in Dulles, and I was being sent out to a satellite office. It turned out to be a good move for my career.It was good for me to be in a new environment where I could learn from new people, and be exposed to the innovation and the brilliance of a lot of the folks in Silicon Valley. It was a bit risky, but it helped me broaden my perspective.

AJ: Whom do you admire?

James: There are so many people. At the risk of sounding like a suck-up (chuckle), the biggest mentor I’ve had throughout my career has been my current boss, Ted Leonsis. I interned for him when I was at Wharton MBA in 1995. I admire and enjoy how he manages to be very engaged in the business of AOL, as well as act as such a pillar of the Washington, D.C., community. That’s quite impressive. And with all that, he has a strong family, which is rare these days!

AJ: Is there any one thing that you’ve learned over the past year, one insight that was sort of an "a-ha moment" for you? James: The biggest "a-ha moment" involved understanding how AOL continues to grow, given the declining dial-up market. We came to this "a-ha" when we recognized that we produce services that people love. There’s a growing advertising market, and we have the ability to cater to that advertising market without cannibalizing or injuring our subscription business.

AJ: Let’s get into that. First, what’s your current title?

James: I am Executive Vice President for Programming, Properties and Productions. Essentially, that means I’m charged with leading the consumer experience. You can think of it this way: it’s my job to make the widgets for the AOL media properties.

AOL is in a few businesses. The one that most people are familiar with is selling connectivity to the Internet, the ISP service. I’m not really involved in that business.

What I’m involved in is our second biggest business, our media business. This business is based on aggregating an audience. In fact, the division in which I work is the Audience Business Unit, headed by Ted Leonsis. The goal of our business unit is to increase audience for our AOL properties, and to monetize that audience through advertising sales, e-commerce transactions, search revenue.

AJ: And when you’re talking about your properties, what are they?

James: We manage properties ranging from Moviefone.com, which is the leading movie Internet site, to the very popular MapQuest, to AOLCityGuide, which is the largest network of local information sites that help locate local restaurants, clubs, museums, events, and so on. We have a kids’ property called KOL and a teens’ property called RED. The list goes on and on. We’re always acquiring more, building more, launching more. Our goal is to grow the number of people who visit our family of websites and then to work with marketing partners to make money from that.

AJ: Is that becoming more of the AOL business model versus the connectivity? How saturated is the connectivity market based on your core demographic?

James: That’s a good question. There’s certainly some evolution going on. I wouldn’t characterize it as an abrupt pendulum swing, because the vast majority of our cash flow still comes from the ISP business, and we expect that to remain the case for some time. Having said that, the dial-up business is declining. But it is declining at a managed rate. It’s not falling off a cliff. Our challenge is to grow the other parts of our business while we manage the decline of the dial-up business.

The good news is that the increasing broadband penetration creates new opportunities for us. We are participating in that broadband growth in two ways. One is by selling subscriptions to AOL’s premium service on top of a basic high speed Internet connection. We find that many of our consumers, particularly existing AOL customers, want the higher speed connection, but they like their AOL experience. They like the user interface; they like the services; they like their email; and – notably – more and more of them like our safety and security features.

Advertising is the second way we’re participating in the growth of broadband. Since more and more consumers are spending more and more time on broadband, they can consume richer and more meaningful consumer experiences, because the technology enables it. And thankfully, the online ad market is demonstrating some healthy dynamics. It’s not only growing, but it’s growing beyond that of the overall advertising market. So, the Internet is stealing share from traditional forms of media, probably from radio and from some print.

AJ: I believe I saw that some time in the next quarter or two you would be opening up more of your subscription-only services to the wider Internet as a way to get your brands out there and expand your audience.

James: We definitely will. Through our research, through talking to consumers, and through understanding the general market dynamics, we have a very good understanding of which services consumers will pay for and which should be available for free.

What the consumer will pay for are things that have true value. That’s why many of the safety and security features that we’ve been offering are resonating well in the marketplace. Those are not things you can go out and download somewhere for free. As a result, much of our core pay value is being derived from those utilities.

That then gives us more confidence to put out more of our content-based, or even some of our communication-based services, for free. AOL has been doing this for a long while, by the way. We have an instant messaging product, AIM, the largest instant messaging product out there, which has been available for free for many years.

In fact, most of our websites are already available for free, whether it’s Moviefone, MapQuest, Netscape.com, or even AOLMusic.com. Some of our services aren’t free, and there’s no reason why they shouldn’t be, quite frankly, because they’re not what is driving the subscription value.

AJ: Are there any interesting books that you’ve been reading or have read lately?

James: I’ve probably been late to this game, but I finished Moneyball a few weeks ago.

AJ: I recommended that in my management newsletter a while back.

James: I was a little late getting to it, but that is definitely a great read for someone who enjoys both business and baseball. Now I’m reading The Best and the Brightest, which is a book about Vietnam by David Halberstam.

AJ: Jim, thanks for taking the time for this interview today. You’re going to make our first "Alum of the Month" piece a great one!

James: Thank you, AJ.

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A. J. Schuler

A. J. Schuler, Psy. D., is President of Schuler Solutions, Inc. (www.SchulerSolutions.com), and author of the recently published 99 Negotiation Nuggets for Winners: Principles Guaranteed to Get You What You Want and Need in Your Life, Business and Career.