Online business Toolkit

Time to drop 'AOL'?

Jim Hu CNET News

Published: 12 Aug 2003 11:40 BST

AOL Time Warner is considering dropping the "AOL" moniker from its corporate name, the company confirmed on Monday.

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 email memo forwarded to CNET News.com, the America Online unit's chief executive, Jonathan Miller, said he approached AOL Time Warner chief executive 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 US Securities and Exchange Commission and the US 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 $106bn (£66.13bn), and the combined company had a market value of $205bn. 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, chief executive Gerald Levin and Chief Operating Officer Bob Pittman, has been swapped out. Richard Parsons, meanwhile, has ascended to chairman and chief executive 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 Optimised, the service is a complete overhaul that emphasises multimedia content and more advanced email and instant-messaging features.