Time Warner Corp. chairman and chief executive Richard D. Parsons yesterday reaffirmed his confidence in America Online, saying the Dulles-based online service is ready for a return to financial growth and product innovation.
Speaking at the company's annual meeting, Parsons said the Time Warner board of directors analyzed and discussed the AOL subsidiary privately on Thursday and emerged convinced that the division has a promising future. He said the directors also reviewed the rest of the far-flung media giant and concluded that they were not interested in selling any major division.
Parsons said that even though the online business has been losing dial-up users -- who constitute most of its subscriber base and revenue -- those losses were slowing, even as AOL was growing its stable of high-speed Internet users, and beginning to gain traction in advertising and other areas.
"AOL is in the process of righting itself and becoming a serious engine of growth for this company going forward. Our commitment is to stay on the path," Parsons said. "We can't run the flag up the pole and declare victory yet. But AOL earnings grew 20 percent in the first quarter of '04 versus the first quarter of '03. I think you are going to see more growth going forward."
After introducing the heads of the other major Time Warner divisions, Parsons neglected to introduce America Online chief executive Jonathan F. Miller as Parsons began talking about the importance of "people" to the overall corporation's success. A few moments later, he made a quick recovery.
"I'm sorry, Johnny," Parsons said. "I got so carried away with people I forgot one. The person most responsible for the turnaround at AOL is Jon Miller. Jon is the quiet one of the group. He is so quiet. I apologize."
In contrast to last year's stormy annual meeting in Northern Virginia -- where former AOL chairman Steve Case and others with close ties to him received votes of no confidence from shareholders angry over the stock price plunge following the AOL-Time Warner merger -- yesterday's meeting was calm.
During this year's session, held at Warner Bros. Studios in Burbank, Calif., and carried on an audio webcast, Case and the other directors received more than 90 percent of the votes cast by shareholders for their re-election to the board.
Parsons did not address the status of ongoing Justice Department and U.S. Securities and Exchange Commission probes into AOL's financial reporting before and after the merger. During a question-and-answer period, he declined to say whether Time Warner, which owns the nation's second-largest cable television system, would bid on the cable assets of Adelphia Communications.