AOL REVEALS POSSIBLE REVENUE BLUNDER

Three Deals Worth $49 Million Cover Six Quarters

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NEW YORK (AdAge.com) -- Beleaguered AOL Time Warner revealed today that it has discovered $49 million worth of transactions at its America Online division that may have been improperly recorded as revenue.

The three transactions in question occurred over six quarters ended March 31 of this year.

Conducting review
The world's largest media company said it is conducting an internal review of ad and e-commerce deals within AOL.

AOL Time Warner faces probes by the SEC and the U.S. Department of Justice into AOL's accounting practices. The investigations began after reports said AOL had manipulated revenue leading to the close of its merger with Time Warner in January 2001.

The company last week

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following a suit filed by an AOL Time Warner shareholder said that "all of the company's accounting has been appropriate and in accordance with generally accepted accounting principles, and we have provided our investors with all appropriate material information about our business."

Financials certified
On Wednesday the company said it certified its financial results as mandated under a new federal law requiring CEOs and chief financial officers must sign off on their companies' quarterly statements.

The company, which recently named Jonathan Miller, a former USA Interactive executive, AOL CEO, is expected to accelerate re-organization in its AOL division to put tighter controls on deal-making and ad reporting in place.

Executive departure
Separately, David Colburn, an AOL Time Warner executive who spearheaded many of the company's advertising and media deals, has left the company, a spokeswoman confirmed.

She declined to comment on whether Mr. Colburn's departure is linked to ad and technology deals now under investigation.

Myer Berlow, another AOL Time Warner ad dealmaker who was president of the company's Global Marketing Solutions Group and then a consultant to AOL, has ceased day-to-day duties but remains an employee, the spokeswoman also said.

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