AOL TIME WARNER TO VOTE ON NAME CHANGE THURSDAY

Board Expected to Approve Elimination of 'AOL'

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NEW YORK (AdAge.com) -- The board of AOL Time Warner is expected to approve a plan to erase "AOL" from the company's name during a meeting tomorrow in New York, according to an America Online executive.

The widely anticipated move became an official matter a month ago when America Online CEO Jonathan Miller formally requested that AOL Time Warner Chairman-CEO Richard Parsons consider removing AOL from the media giant's name in order to shore up the battered AOL consumer brand.

Executive's memo
In a memo to employees announcing the

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request, Mr. Miller wrote: "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 shorthand for the world's largest media company."

An AOL Time Warner spokeswoman declined to comment on the name change or the board meeting, which is slated to take place tomorrow in New York City.

Many industry observers view the pending move as an acknowledgement that the $112 billion merger of America Online and Time Warner failed to live up to the hype. Contrary to Mr. Miller's memo, the America Online unit is widely perceived to have tainted the corporate brand, its own brand and the company's stock price. The online division is the subject of ongoing investigations by the U.S. Department of Justice and the Securities and Exchange Commission into allegations of improper accounting.

A relief for some staffers
The name change would come as a relief to Time Warner employees, who first were riled by what they perceived as post-merger arrogance by AOL-side staffers and then suffered a cratering in value of their stock options. "There's a strong consensus within the company this should happen," one senior company executive said.

The corporate logo will change and the stock ticker symbol will return to "TWX."

Spin-off unlikely
Spinning off the AOL division is unlikely in the near term. Mr. Parsons has made debt reduction across AOL Time Warner a major priority and expects to have shaved off $20 billion by year-end 2004, mostly by shedding assets. The company announced yesterday that, pending NBA and NHL approval, its Turner Broadcasting Systems unit agreed to transfer ownership of the Atlanta Hawks and Atlanta Thrashers, as well as relating arena operating rights, to investment partnership Atlanta Spirit LLC.

America Online is on the cusp of launching the latest version of its service -- AOL 9.0, designed to wean consumers from dial-up to broadband Internet service. America Online is not doing well financially -- on July 23 the division reported a 6% decrease in revenue, due to weak advertising and slow subscription revenue growth. Advertising revenue for the service dropped 48% while subscription revenue rose 6% to $1.9 billion, despite the loss of approximately 850,000 subscribers during the quarter. Nearly half the subscriber losses were profit-draining accounts dropped by the service itself.

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