Time Warner Inc.
75 Rockefeller Plaza
New York, N.Y. 10019
www.aoltimewarner.com Year founded: 1922 Industry: Media Revenue: n/a Net Income/Loss: n/a Earnings per share: n/a Dividend: n/a Stockholder equity: n/a Auditor: Ernst & Young LLP Stock: TWX Assets: n/a Market capitalization: n/a 52-week high: n/a 52-week low: n/a Chairman: Steve Case CEO: Richard Parsons Employees: 19500 Local employees: 5400 Description: The Dulles-based America Online division of Time Warner is the nation's biggest Internet service company, with $8.6 billion in revenue. It merged with New York-based media company Time Warner in January 2001. Developments: AOL had a rocky year, marred by a declining U.S. subscriber base, sharp drops in advertising and continuing federal probes by the Securities and Exchange Commission and Justice Department into its financial reporting before and after the Time Warner merger. Time Warner's board voted to scratch the "AOL" from its corporate name, symbolizing the transformation of America Online from the dominant force in the merger to a division of a diversified New York-based media company. Former AOL chairman Steve Case stepped down as chairman and, though he remains on the Time Warner board, his influence has waned. AOL's image took another hit during the Super Bowl as the paid sponsor of the halftime show. The company, which emphasizes parental controls as a benefit of its online service, found itself oddly embroiled in the controversy created by Janet Jackson's exposed breast. The company struggled as its core dial-up online service lost millions of subscribers to faster and cheaper competitors. In early 2004, it sought to slow the exodus of subscribers by launching a budget-price, bare-bones Internet service under the Netscape brand name. Initially, at least, the Netscape service is primarily being marketed online and used to try to hold onto fleeing subscribers who call to cancel their AOL service due to price. AOL still employs 19,500 employees worldwide and 5,400 in the Washington area. By slashing computer-network expenses, the company managed to hold down costs and generate about $1 billion in cash for its corporate parent last year. And AOL is projecting a return to growth in 2004, fueled by projected growth in ad revenue from a partnership with Google and a campaign to persuade more subscribers to keep a souped-up, $14.95-a-month version of America Online even as they access the Internet through high-speed cable and telephone connections. Time Warner executives and investors will be watching closely to see whether AOL can make good on these promises.
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