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Return to sender: AOL nixes e-mail rule

AOL Time Warner, the e-mail titan's parent company, is no longer requiring its many high-profile divisions to exclusively use a service developed by its Netscape subsidiary.

America Online, the world's most popular Internet service, seems to be losing its home-field advantage.

Executives at AOL Time Warner, the parent company of AOL, are no longer requiring its many high-profile divisions to exclusively use an e-mail service developed by AOL's Netscape subsidiary. This flies in the face of a directive established last May that required all AOL Time Warner employees to use AOL technology as their corporate e-mail service.

Since the merger between AOL and Time Warner, executives have been trying to weave AOL's influence throughout the company's array of media and entertainment divisions. In the case of using AOL e-mail, the move was a gesture of solidarity behind the service and also offered potential cost savings by eliminating licensing fees for corporate e-mail software, such as Microsoft's Outlook or IBM's Lotus Notes.

Some AOL Time Warner divisions, including magazine publisher Time Inc. and Warner Music Group, were required to use a customized product developed by AOL's Netscape.

AOL Time Warner spokeswoman Tricia Primrose said the Netscape product was developed to meet specific needs of the company's various divisions.

"Unfortunately, it didn't work for everybody," Primrose said. "So we decided to give everybody the choice that met their needs. Some will stay with it, some will move to others."

AOL Time Warner divisions now are permitted to license e-mail management software from non-affiliated companies, such as Microsoft and IBM.

Other divisions have decided to stick with AOL and/or Netscape consumer e-mail products including AOL corporate, AOL Time Warner corporate and Time Warner Cable, according to Ann Brackbill, a spokeswoman for the AOL division.

Brackbill added that since the merger, the company has also consolidated its network backbone onto AOL's, which has made network operations across the company more efficient.

In the past, AOL Time Warner employees had been quick to complain about being forced to use AOL's e-mail system. The complaints mainly centered on the system's shortcomings for daily business tasks such as difficulty in sending large attachments and a reliance on cumbersome security features, according to an AOL Time Warner employee who spoke under the condition of anonymity.

AOL Time Warner executives have been trying to show how the marriage between the companies would chart a new course for the media empire. The company has taken steps to reduce costs by consolidating the technical management of all its Web sites, including those from Time Inc. magazines and Warner Bros. Executives have also been touting the company's ability to cross-promote its offline products, such as movies and television shows, to AOL's Internet audience.

However, most of these crossover benefits have been anecdotal. Furthermore, AOL Time Warner's latest financial earnings report showed that the AOL division, under fire for its lackluster financial growth, gained $138 million worth of advertisements from other AOL Time Warner divisions during the fourth quarter of 2001. That spending helped the AOL division report less of a revenue loss from the sour advertising environment.

News.com's John Borland contributed to this report.