AOL Time Warner has been rocked by the resignation of one of its most senior executives as the sense of crisis deepens at the world’s largest media company.
The chief operating officer, Robert Pittman has stepped down as head of AOL’s internet arm, a position he only resumed in April. The advertising recession hit the business hard and it has been struggling to encourage new subscribers and broadband take-up.
Pittman inspired AOL’s rise to web prominence in the late nineties and since the takeover of Time Warner, had repeatedly supported moves to converge the group’s online and offline divisions. The onus is now on the chief executive, Richard Parsons to rebuild confidence and unity at the mass media corporation.
The COO’s departure comes on top of allegations, printed in The Washington Post this week, that AOL had used ‘unconventional’ accounting practices to boost its revenues by $270 billion over the last two years.
The value of AOL Time Warner has plummetted almost 90% since the high profile merger in January 2000 and it has already been forced to downgrade revenue forecasts for this year (see Box Office Success Offsets AOL Time Warner Losses). At the close of trading on Thursday, shares were down 66 cents at $12.45.
