Time Warner Chief to Decide Over 2 Years When to Retire
Friday, June 8, 2007
Time Warner chief executive Richard D. Parsons, who took over in 2002 to revive the largest U.S. media company after it was acquired by America Online, said yesterday that he would decide within the next couple of years when to step down.
After years of speculation about the prospect of a sale or spinoff of the AOL Internet service division, Parsons also said the company would be able to decide whether AOL's new business strategy is a success by the end of this year.
"Have we found a path, an approach that will guarantee sustainable growth?" he said. "We are making the right moves."
Parsons, 59, said one of his remaining challenges is ensuring that AOL is turning around. With declining subscribers to its Internet access service, AOL last year offered its e-mail and other services free to attract users and advertisers.
Parsons is still grappling with declining revenue at the Internet unit, six years after AOL bought Time Warner in a transaction that led to record debt and losses in 2002.
"I want to leave the company in good shape and in good hands," Parsons said at a Merrill Lynch investment conference in London. "Within one or two years, sometime in that time frame, I will conclude it is in good shape."
Time Warner shares, which peaked at $94 in December 1999, closed yesterday at $20.45, down 32 cents. They have gained about 10 percent since May 2002, when Parsons was named chief executive.
Parsons promoted Jeffrey L. Bewkes to company president in January 2006, effectively making him his heir apparent. Bewkes, a former chief executive of Time Warner's HBO cable network, pushed for the change at AOL.
In November, Parsons hired NBC veteran Randy Falco as chief executive of AOL to implement the strategy. AOL's online ad sales rose 40 percent in the first quarter, but that wasn't enough to compensate for a drop in subscriptions, and the unit's revenue fell 25 percent in the quarter.