AOL Time Warner Puts Faith In Old Media
The board of AOL Time Warner has elected Dick Parsons to both the post of chairman and chief executive, following the departure of Steve Case (see AOL Chairman Quits Following Shareholder Unrest).
Analysts have suggested the decision reflects a shift in the balance of power within the company, as Case who headed up the America Online division makes way for Time Warner’s Parsons.
The appointment, which comes almost three years after the two companies announced their intention to merge, follows a turbulent period for the group, which has been racked by falling ad revenues and allegations of accounting impropriety.
The merger, which occurred at the pinnacle of the dot.com boom, was regarded as the ultimate synergy of old and new media. However, the subsequent 70% fall in the stock price has led many analysts to believe that AOL’s America Online unit was grossly over-valued. The appointment of Parsons and a new line of executives from the Time Warner side of the business only serves to reflect this valuation.
The outgoing chief executive acknowledges the merger has not lived up to market expectations, but expressed confidence in the future. “If you look ahead 10 to 15 years, I think people will look back and have different views on this merger,” Case told US news network CNBC.
Parsons is also positive about the future of the beleaguered group, commenting: “I am highly gratified that the Board shares my determination to maximise AOL Time Warner’s tremendous potential. As we address the challenges facing our company and the industries in which we operate, I will work together with the extraordinary people in this company to focus on increasing value for our customers and our shareholders.”
AOL Time Warner: 020 7348 8000 www.aoltimewarner.com
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