October 13, 2003 10:25 AM PDT
The return of Time Warner
The world's largest media company will drop the "AOL" and change its corporate name back to Time Warner on Thursday, a symbolic step to distance itself from the black eye of a failed merger. Time Warner will also return to using its former ticker symbol, "TWX," and change its corporate Web site to www.timewarner.com beginning Thursday.
The change does not affect the company's operations. The U.S. Securities and Exchange Commission and the U.S. Department of Justice will continue to investigate Time Warner for the accounting practices of its America Online unit. Time Warner will also continue to grapple with its mountainous debt, which totaled $24.2 billion as of June 30.
"We continue to seek to cooperate with the government on their investigations," company spokeswoman Tricia Primrose said.
The name change will bring the company's traditional media assets to the forefront while pushing the problems of its AOL unit into the background. Time Warner businesses such as Time Warner Cable, Time Inc. and Warner Bros. have performed well since the merger between AOL and Time Warner closed in January 2001.
"I hope it's a step in the right direction, because it helps them focus on their growth businesses," said Youssef Squali, an equity analyst at First Albany.
But issues at AOL continue to weigh on the company. Over the past two quarters, AOL has watched its dial-up subscriber base slip, culminating in the loss of 846,000 members last quarter. Though it attributed some of those losses to defections to broadband services, the company said a change in its method of counting subscribers to exclude discount or promotional members also contributed to the number drop.
AOL is now trying to appeal to the growing numbers of broadband users by selling its service as a broadband service add-on for $14.95 a month.
Time Warner will report quarterly earnings on Wednesday, Oct. 22.