Parsons aims to get AOL 'back on track'
Published: 17 May 2002 07:31 BST
Richard Parsons, AOL Time Warner's new chief executive, on Thursday laid out a five-point plan to get the media giant "back on track."
Parsons took the reins from outgoing chief executive Gerald Levin, who bade an emotional farewell to the audience at the company's annual shareholders meeting here.
The executive handover comes as AOL Time Warner faces a critical juncture in its brief and tumultuous history. Created during the height of the dot-com boom, the company that once billed itself as the next-generation media conglomerate has instead become a dream deferred. Although it has seen strong performance in some of its traditional media divisions, its America Online arm -- once billed as the company's "growth engine" -- has sputtered.
"In the past 18 months or so, everything has changed," Parsons said.
The five goals that Parsons has set up are these: revitalise the company, restore credibility with investors, guard the integrity of the balance sheet, simplify the corporate structure and re-energise the people who work there.
Ahead of the meeting, analysts said that the company seems to be toning down its talk of synergy. "It appears that the course for AOL Time Warner is now being plotted by the Time Warner influence, as opposed to the long-term vision mantra earlier popular at America Online," Phil Leigh, an analyst at Raymond James, said in a research note. "This 'back to basics' strategy seems to imply that AOL Time Warner is returning to its focus of creating and marketing compelling content, regardless of the method of distribution."
Analysts also said that AOL Time Warner's biggest issue right now is restoring credibility on Wall Street. In its first quarter earlier this year, the company reported $54bn in losses relating to the merger. And its stock has taken a steady drubbing in recent months. In May, its shares have been hovering around $19, having dropped some 70 percent of their value since the time of the merger.
"It's a source of deep disappointment for us," Parsons said. His priority, he added: "building value for shareholders."
News.com's Larry Dignan contributed to this report.
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