AOL Time Warner, the US media giant, is considering dropping the AOL name from its corporate masthead in a symbolic reversal from the $160bn merger of Time Warner and America Online three years ago.
The proposal - made by senior management of the AOL division - will be considered at a group board meeting next month.
**** Parsons, group chief executive, discussed the move in talks on Monday with Jonathan Miller, head of the AOL division.
Mr Miller, appointed last year to reinvigorate the AOL division, ordered an internal study to review the impact of the brand name on the parent company and the operating subsidiary.
In a detailed memo to Mr Parsons he is said to have urged the group chief executive "to give me back my brand".
Mr Miller, who is pushing through a transition from dial-up services to higher-margin broadband networks at AOL, urged Mr Parsons to agree the name change to emphasise AOL's divisional status within the company.
The proposal coincides with the division's $250m launch of its new 9.0 operating system, seen as a vital tool to win new broadband customers.
Dropping the AOL name would amount to an explicit recognition of what the company's senior executives have already confirmed: that the AOL Time Warner merger was a spectacular failure.
Three of the four most senior executives at the time of the merger - chairman Steve Case, chief executive Gerald Levin and co-chief operating officer Bob Pittman - have already stepped down. No former AOL executives remain among the company's senior ranks.
Earlier this year Mr Case and two fellow directors narrowly survived an attempt by leading investors to remove them from the board.
Nonetheless, removing the AOL name would be widely welcomed by employees across the Time Warner empire, who view it as a painful reminder of the merger which was responsible for wiping out their retirement accounts.
Divisional executives have long railed against the continued use of the name, arguing that it has highlighted the underperforming America Online division and overshadowed the strong performances of other units, such as the Warner Brothers film studio, and cable networks, such as HBO and TNT.
Some insiders also believe that the company's decision to adopt AOL as its ticker symbol has also prompted investors to pay too much attention to the ailing division.
If the company decides to drop the AOL name it may return to its old Time Warner symbol, TWX.
However, investors in AOL said renaming the company and changing the stock symbol would not affect their attitude to the company's shares.
Mr Parsons has so far resisted the pressure to drop the name, arguing that it would undermine already fragile morale among America Online employees.
Some analysts may interpret the proposal as a sign that AOL Time Warner is preparing to spin off America Online. However, senior executives have indicated that they would only consider such a move if AOL's current management team fails to revive the business in the next few years.
Mr Parsons had, initially, wanted to preserve the AOL Time Warner group title until the SEC had concluded its investigations into the online division's treatment of some $400m in advertising revenues.
The investigation - one of several dogging AOL - centres on the group's purchase last year of a 50 per cent stake in AOL Europe from Bertelsmann, the German media group, for $6.75bn.
AOL Time Warner has already admitted that it "inappropriately recognised revenues" of $190m, partly linked to the Bertelsmann transaction.
Although the figures are not significant in the context of AOL Time Warner's total revenues last year of $42bn, the investigations and emphasis on AOL's trading performance have continued to weigh on the stock.
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The proposal - made by senior management of the AOL division - will be considered at a group board meeting next month.
**** Parsons, group chief executive, discussed the move in talks on Monday with Jonathan Miller, head of the AOL division.
Mr Miller, appointed last year to reinvigorate the AOL division, ordered an internal study to review the impact of the brand name on the parent company and the operating subsidiary.
In a detailed memo to Mr Parsons he is said to have urged the group chief executive "to give me back my brand".
Mr Miller, who is pushing through a transition from dial-up services to higher-margin broadband networks at AOL, urged Mr Parsons to agree the name change to emphasise AOL's divisional status within the company.
The proposal coincides with the division's $250m launch of its new 9.0 operating system, seen as a vital tool to win new broadband customers.
Dropping the AOL name would amount to an explicit recognition of what the company's senior executives have already confirmed: that the AOL Time Warner merger was a spectacular failure.
Three of the four most senior executives at the time of the merger - chairman Steve Case, chief executive Gerald Levin and co-chief operating officer Bob Pittman - have already stepped down. No former AOL executives remain among the company's senior ranks.
Earlier this year Mr Case and two fellow directors narrowly survived an attempt by leading investors to remove them from the board.
Nonetheless, removing the AOL name would be widely welcomed by employees across the Time Warner empire, who view it as a painful reminder of the merger which was responsible for wiping out their retirement accounts.
Divisional executives have long railed against the continued use of the name, arguing that it has highlighted the underperforming America Online division and overshadowed the strong performances of other units, such as the Warner Brothers film studio, and cable networks, such as HBO and TNT.
Some insiders also believe that the company's decision to adopt AOL as its ticker symbol has also prompted investors to pay too much attention to the ailing division.
If the company decides to drop the AOL name it may return to its old Time Warner symbol, TWX.
However, investors in AOL said renaming the company and changing the stock symbol would not affect their attitude to the company's shares.
Mr Parsons has so far resisted the pressure to drop the name, arguing that it would undermine already fragile morale among America Online employees.
Some analysts may interpret the proposal as a sign that AOL Time Warner is preparing to spin off America Online. However, senior executives have indicated that they would only consider such a move if AOL's current management team fails to revive the business in the next few years.
Mr Parsons had, initially, wanted to preserve the AOL Time Warner group title until the SEC had concluded its investigations into the online division's treatment of some $400m in advertising revenues.
The investigation - one of several dogging AOL - centres on the group's purchase last year of a 50 per cent stake in AOL Europe from Bertelsmann, the German media group, for $6.75bn.
AOL Time Warner has already admitted that it "inappropriately recognised revenues" of $190m, partly linked to the Bertelsmann transaction.
Although the figures are not significant in the context of AOL Time Warner's total revenues last year of $42bn, the investigations and emphasis on AOL's trading performance have continued to weigh on the stock.
http://news.ft.com/servlet/ContentS...y&c=StoryFT&cid=1059478917191&p=1012571727088