Google executive Tim Armstrong has been hired by AOL to replace chairman and CEO Randy Falco, as the once-popular ISP struggles to keep pace with competitors under its new advertising-supported content model.

Armstrong was most recently the president of the Google American operations, where he was responsible for North American and Latin American advertising sales and operations. He was still listed as an executive on the Google website on Thursday afternoon, when AOL's parent company, Time Warner, made the announcement that it had hired him.

Falco, along with Chief Operating Officer Ron Grant, will leave AOL after an unspecified transition period, Time Warner said.

AOL's business has slumped under Falco's leadership. Many industry observers criticised his appointment in 2006 when he replaced Jonathan Miller, who had engineered AOL's successful transition from a business based on subscription fees to one based on advertising. Falco had virtually no experience running an online business at the time, and since his appointment AOL has largely failed to grow its ad revenue on par with the industry average.

In January he presided over layoffs of 700 people, or 10 percent of the AOL staff. That followed layoffs of 2,000 people, or 20 percent of the company, in 2007.

Time Warner praised Falco's work in its statement about his departure. Chairman and CEO Jeff Bewkes said Falco assembled a strong display ad network and grew the number of unique visitors to AOL sites.

Bewkes said he expects Armstrong to be helpful in determining the optimal structure for AOL at Time Warner. In December, Time Warner partly blamed AOL for the lowered financial forecast for its 2008 fiscal year.