NEW YORK: It was two and a half years ago that the Internet service provider AOL merged with Time Warner. Now that relationship as well as public perception of the media conglomerate is deteriorating so much that key AOL members are keen for its name to be dropped from the company's name.
A Reuters report states that AOL's chief executive Jonathan Miller approached AOL Time Warner CEO Richard Parsons over the name change. The name change is considered important as it would reflect the reality that AOL is merely a division and not the leading division. The company also wants to end confusion caused by the media and investors who refer to the overall corporate entity as AOL instead of AOL Time Warner.
The old Time Warner executives consider the AOL addition to be a blot on the company's reputation. In January 2003 the media conglomerate reported a $44.9 billion fourth quarter loss due to a huge charge for the shrinking value of the America Online unit.
Last month while Time Warner reported strong second-quarter earnings AOL's operating income was reduced by 23 per cent to $210 million from $247 million. AOL lost 846,000 subscribers in the quarter, more than analysts were expecting.
Adding to Time Warner's embarrassment is the fact that the Securities and Exchange Commission found problems with AOL's accounting of two deals with Germany's Bertelsmann. A probe is currently underway. AOL Time Warner shares have gone down in value by two-thirds since the merger.