Online giant looks to distance itself from AOL Time Warner

By Holly M. Sanders
Bloomberg News Service

NEW YORK — AOL Time Warner Inc. Chief Executive Officer Richard Parsons is considering a request from America Online executives to drop "AOL" from the name of the world's biggest media company.

Jonathan Miller, chief executive of America Online, asked Parsons in the past few days to change the name and revert to "Time Warner," according to an e-mail he sent to employees. Miller argued that keeping AOL in the name confuses consumers and fails to distinguish between the online division and the parent company.

"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 in the e-mail. "Any controversy or criticism involving the corporate entity has actually hit our consumer brand."

Executives who came to the company from Time Warner Inc. have supported a name change for different reasons. They've said the parent company is being tarnished by the online unit's woes, which include subscriber losses and an accounting probe. Since America Online's purchase of Time Warner, the combined company's shares have declined 66 percent and Time Warner executives have taken control of the company.

Parsons and the board may consider the name change when they meet next month, spokeswoman Mia Carbonell said.

Some investors and executives have said the company should wait to change its name until the Securities and Exchange Commission concludes its investigation, which would keep the new name free from taint. Others said a name change would follow management turnover and operational changes under way.

"It's a change in name only," said Dean Kartsonas, a money manager at Federated Investors Inc., who holds 1.9 million AOL Time Warner shares. "There's no doubt that all the people in senior management positions today come from Time Warner."

Brand consultants said it makes sense for the company to make the change now rather than wait.

"Usually, the damage is done when the question's been raised," said John V. Allen, a senior partner at Lippincott & Margulies, a brand-consulting firm. "The sooner they start rebuilding their brand and focus on what they really do well, the better."

AOL Time Warner shares rose 30 cents to $15.53 at 4:15 p.m. in New York Stock Exchange composite trading.

Miller in his e-mail told employees that the name change would likely bring new criticism about the 2001 purchase.

"I recognize fully that it would seem to many that AOL is diminished if our corporate parent reverts to the Time Warner name," Miller wrote. "And there is no question this will provide the media yet another opportunity to write negatively about the merger of AOL and Time Warner."

Former America Online Chief Executive Officer Stephen Case and former Time Warner Chief Executive Officer Gerald Levin engineered the combination. Case remains on AOL Time Warner's board after stepping down this year as chairman. Levin last year resigned as chief executive.