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AOL Asking Time Warner to Drop 'AOL' Name

Posted on: Tuesday, 12 August 2003, 06:00 CDT

By SETH SUTEL

NEW YORK (AP) -- America Online is asking AOL Time Warner Inc. to drop "AOL" from its name, concerned that negative publicity about the parent company is hurting the online service's efforts to right itself.

Jonathan Miller, chief executive of America Online, told his staff in an e-mail Monday that "AOL" the online service was becoming confused with "AOL" as shorthand for the world's largest media company.

"I believe it's time for us to get our brand back," Miller said in his note. "Any controversy or criticism involving the corporate entity has actually hit our consumer brand."

Executives from the Time Warner side of the company have been agitating for just such a change for months, but Miller stressed in his note that it was his idea to propose to AOL Time Warner chief executive Richard Parsons that AOL be dropped from the corporate name.

Mia Carbonell, a spokeswoman for AOL Time Warner, said Parsons and other senior managers were considering Miller's proposal but that the final decision would be up to the company's board. She declined to say whether the issue would be on the agenda at the board's meeting in September.

The story was first reported by The Wall Street Journal on its Web site.

AOL Time Warner's name has been tarnished as the Securities and Exchange Commission investigates numerous accounting issues at the company, mainly at the AOL division. The company has also been hit with numerous shareholder lawsuits that accuse AOL Time Warner of misleading investors.

America Online has been struggling to turn itself around as dial-up subscribers continue to abandon the service for faster ways to connect to the Internet. Revenues and earnings at AOL are falling, and subscriber losses have increased faster than many analysts were expecting.

If the AOL name is dropped, it would represent the latest retreat from the lofty goals of the deal announced in January 2000 under which AOL agreed to purchase Time Warner.

Since then, several senior managers from the AOL side of the company have left or lost power, and veterans from Time Warner including Parsons are firmly in control. The company has also abandoned promises of rapid growth and "convergence" among different corporate divisions.

AOL Time Warner's shares rose 30 cents to close at $15.53 in Monday trading on the New York Stock Exchange.

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