AOL, Inc. (NYSE:AOL) has confirmed today that its CEO of advertising division AOL Networks, Ned Brody, has resigned from the company, says a report from TechCrunch. The company confirmed that the resignation follows a report from AllThingsD that Yahoo may want Ned to fill in the vacant position of the head of sales for North America. AOL has not yet found a replacement for Brody, but for the time being CEO Tim Armstrong will take on the additional charge.

AOL Ned Brody

If the report saying Yahoo! Inc. (NASDAQ:YHOO) tapping AOL, Inc. (NYSE:AOL)’s employee is true, then it could severely strain the relationship between the two companies, who at present work jointly in a display advertising partnership along with Microsoft Corporation (NASDAQ:MSFT).

An internal memo from Armstrong also confirms the news of the resignation. In the memo, Armstrong says Brody has “resigned to pursue other opportunities.” The CEO also told that former PepsiCo, Inc. (NYSE:PEP), Peter Land will join as SVP of corporate communications.

The position, which according to the report, Brody has been asked to fill by Yahoo! Inc. (NASDAQ:YHOO), was earlier held by Ross Levinsohn.  In terms of advertising revenue and audience, North America is the biggest contributor for Yahoo.

Another important twist, is the region is also important for AOL, Inc. (NYSE:AOL), therefore, the company has a 12-month non-compete clause in place for Brody. Though it is still unconfirmed if Brody will take up the job at Yahoo, but as per the report from ATD, AOL may come up with some legal challenge.

Although AOL Networks is a small contributor to AOL, Inc. (NYSE:AOL)’s business today, it has been growing impressively. For the fourth quarter, Networks division posted revenues of $183.4 million against $213.2 million for the Brand group and $230.8 million for the Membership group, which includes AOL mail and paid services. In percentage terms, revenues for the Networks have grown by 9 percent, compared to a 9 percent decline for Membership and 4 percent gain for Brand.

Brody’s resignation comes about two months after AOL announced some big management changes. Earlier, Artie Minson, who had been the company’s COO left the firm and Susan Lyne was appointed as the new CEO of AOL’s brand group.

Yahoo! Inc. (NASDAQ:YHOO)’s new CEO Marissa Mayer has been on a hiring spree to replace more or less the whole executive team including a new COO, CFO and more.

The company has been trying hard to regain its lost glory, and so far it has been an impressive performance from the CEO as the company’s stock price have gained 53 percent in last six months.