August 11, 2003 1:56 PM PDT
AOL Time Warner mulls name change
Members of AOL Time Warner's board of directors may consider the issue when they meet in September. Should the name change go through, AOL Time Warner would revert back to Time Warner.
In an e-mail memo forwarded to CNET News.com, the America Online unit's CEO, Jonathan Miller, said he approached AOL Time Warner CEO Richard Parsons with the suggestion to drop the AOL from AOL Time Warner.
"Since the merger in early 2001, the three letters AOL have ceased to stand for the Internet and the promise it entails and instead have become the shorthand for the world's largest media company," Miller wrote. "As AOL Time Warner became known as, for all intents and purposes, 'AOL,' any controversy or criticism involving the corporate entity has actually hit our consumer brand."
This is not the first time AOL has been considered for removal from the corporate AOL Time Warner name. Board members last year were considering the drop in the hope of stripping away an association with its embattled Internet division.
"Dick Parsons and senior management are considering a name change as a result of the America Online request," an AOL Time Warner representative said. "But this will be a decision that will be made in due course with the board."
The possibility of a name change comes as AOL Time Warner continues to watch its America Online division crumble. Besides AOL's bleak outlook for online advertising revenue, its dial-up subscriber base, long considered its rock of stability, last quarter declined by 846,000 members. Executives blamed the drop on its new method of reporting subscribers and the ongoing effects of subscriber defections to broadband and discount dial-up services.
AOL Time Warner also continues to face investigations by the U.S. Securities and Exchange Commission and the U.S. Department of Justice over allegations that the AOL unit improperly reported online advertising revenue. Reports in recent weeks have surfaced that AOL offered heavily discounted subscriptions in bulk to retail partners to show continued growth.
America Online and Time Warner merged in January 2001 in a blockbuster deal that joined the world's largest Internet service with the world's largest media conglomerate. The deal at the time was valued at $106 billion, and the combined company had a market value of $205 billion. AOL owned the majority of the combined company's shares.
Since then, the company has missed its financial goals, and the original batch of AOL leaders, including Chairman Steve Case, CEO Gerald Levin and Chief Operating Officer Bob Pittman, have been swapped out. Richard Parsons, meanwhile, has ascended to chairman and CEO of the company.
In an attempt to revamp its service, AOL in July launched a new version of its service that's geared for broadband. Called AOL 9.0 Optimized, the service is a complete overhaul that emphasizes multimedia content and more advanced e-mail and instant-messaging features.