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...last week Pittman had to be called on once again to save AOL, which is beginning to look like the media giant's albatross. After eagerly devouring Pittman's hype just a year ago, investors and critics now feel woozy. Incoming AOL Time Warner CEO Richard Parsons, 54, clearly felt that nobody could clean up the mess better than Pittman, which is why he asked his top deputy to go back to Dulles, Va., on a new rescue mission. "AOL is our biggest problem, and so we're putting our best fighting general on it," says Parsons, who was designated...
Pittman takes over from Barry Schuler, the former tech entrepreneur who has run AOL since the merger in January 2001 and will now head a new interactive services division. Although Pittman, 48, is known as an agile manager with an uncanny ability to build big consumer brands, this is the Mississippi native's biggest test. He must restore AOL's luster and regain the trust of colleagues, business partners and, most important of all, Wall Street...
...fact is, two years after the merger was announced, AOL Time Warner's top brass is being forced to prove the decision was not a mistake. Despite its powerful brand and unrivaled global member base of 34 million, the AOL division has seen its once stratospheric subscriber growth slow, its ad revenue fall and its international operations bleed money. The much ballyhooed broadband move--in which networked homes will enjoy high-speed connections to movies and music whenever they want--is off to a rocky start. Any delay is crucial to consumers eagerly anticipating the broadband revolution, because if AOL...
...AOL service's woes have infected all of AOL Time Warner, whose stock is the third most widely held in the U.S. By the end of last week, those shares had dropped to $20.10--wiping out nearly two-thirds of the market value of the combined companies since their merger was announced in January 2000. Several Wall Street analysts estimate the company's cable, entertainment and publishing divisions (which include CNN, Warner Bros., Warner Music and Time Inc., the parent company of this magazine) are worth about $19 a share. That leaves AOL near zero. When it reports its first...
...situation is serious enough, however, that Case says he will rely more heavily on his founding fraternity to set the company right. AOL's cash cow is its 26 million U.S. subscribers, most of whom pay $23.90 a month for AOL's dial-up service. Almost half of that subscription revenue represents pure profit. But the U.S. dial-up market is already close to 60% saturation and isn't expected to hit 70% before 2005. AOL subscriber growth this year is estimated to drop to about 10%, just a third of its torrid pace...