Year in review: AOL troubles
A look back at a difficult year for AOL and Time Warner's marriage.
A look back at a difficult year for AOL and Time Warner's marriage.
How could something that seemed so right go so wrong?
Sure, the swagger displayed by America Online executives trying to tell Time Warner veterans how to run their businesses rubbed many the wrong way. But AOL's money problems were the real undoing.
Once considered the "jewel in the crown" by former AOL Time Warner Chief Executive Gerald Levin, AOL has watched its online advertising revenue nosedive. Earlier this month, AOL Time Warner announced that advertising and commerce revenue for the online division would drop 40 percent to 50 percent in 2003. That's on top of a Securities and Exchange Commission investigation into AOL's accounting practices, an internal investigation that forced AOL Time Warner to restate earnings by $190 million and sent angry shareholders looking for their next scapegoat to hang.
AOL Time Warner's stock price, which traded as high as $35 at the end of 2001, has fallen as low as $8.70 largely because of AOL's troubles. In reaction, AOL Time Warner's board of directors has chopped enough heads to give Henry VIII a run for his money.
Here's a partial list of executives that have since departed from AOL Time Warner's Rockefeller Center executive suite and AOL's Dulles, Va., bunker:
Gerald Levin, former AOL Time Warner CEO; Robert Pittman, former AOL Time Warner co-chief operating officer; J. Michael Kelly, former AOL Time Warner chief operating officer and currently head of AOL's international operations; Kenneth Lerer, AOL Time Warner's former communications head, now in a newly created position; Mayo Stuntz, former executive vice president at AOL Time Warner; Marshall Cohen, also former executive vice president; Barry Schuler, former CEO of the AOL division; James de Castro, former president of AOL's interactive services division.
The story's not over. For the past two months, speculation has heightened that members of AOL Time Warner's board have joined with influential shareholders to orchestrate Chairman Steve Case's ouster. AOL Time Warner continues to insist Case's job is secure, but all bets are off from a company that once seemed invincible in the eyes of futurists.
The union between the world's largest Internet company and the world's largest media company became a nuptial nightmare in 2002.
The honeymoon's over A look back at a difficult year for AOL and Time Warner's marriage.
How could something that seemed so right go so wrong? Sure, the swagger displayed by America Online executives trying to tell Time Warner veterans how to run their businesses rubbed many the wrong way. But AOL's money problems were the real undoing. Once considered the "jewel in the crown" by former AOL Time Warner Chief Executive Gerald Levin, AOL has watched its online advertising revenue nosedive. Earlier this month, AOL Time Warner announced that advertising and commerce revenue for the online division would drop 40 percent to 50 percent in 2003. That's on top of a Securities and Exchange Commission investigation into AOL's accounting practices, an internal investigation that forced AOL Time Warner to restate earnings by $190 million and sent angry shareholders looking for their next scapegoat to hang. AOL Time Warner's stock price, which traded as high as $35 at the end of 2001, has fallen as low as $8.70 largely because of AOL's troubles. In reaction, AOL Time Warner's board of directors has chopped enough heads to give Henry VIII a run for his money. Here's a partial list of executives that have since departed from AOL Time Warner's Rockefeller Center executive suite and AOL's Dulles, Va., bunker: Gerald Levin, former AOL Time Warner CEO; Robert Pittman, former AOL Time Warner co-chief operating officer; J. Michael Kelly, former AOL Time Warner chief operating officer and currently head of AOL's international operations; Kenneth Lerer, AOL Time Warner's former communications head, now in a newly created position; Mayo Stuntz, former executive vice president at AOL Time Warner; Marshall Cohen, also former executive vice president; Barry Schuler, former CEO of the AOL division; James de Castro, former president of AOL's interactive services division. The story's not over. For the past two months, speculation has heightened that members of AOL Time Warner's board have joined with influential shareholders to orchestrate Chairman Steve Case's ouster. AOL Time Warner continues to insist Case's job is secure, but all bets are off from a company that once seemed invincible in the eyes of futurists. --Jim Hu | Earnings to come up short January 7, 2002 AOL chief Barry Schuler steps down April 9, 2002 Parsons brings execs in line May 24, 2002 No. 2 exec hands in resignation July 18, 2002 SEC probe overshadows profit July 24, 2002 Search for permanent CEO ends August 6, 2002 Management overhauled in HBO move September 12, 2002 Will Case get canned? September 18, 2002 Investigation finds inflated numbers October 23, 2002 Top America Online exec departs November 12, 2002 Time for some housecleaning December 3, 2002
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