AOL Time Warner Inc's Richard Parsons said he knows not to expect a honeymoon from investors when he takes over as chief executive officer of the world's biggest media and Internet company this week.
"I didn't even get any wedding presents," Parsons quipped at a conference this month. AOL Time Warner said in December that Parsons, now co-chief operating officer, would succeed Gerald Levin, who is retiring 14 months after the company was created in the biggest corporate acquisition ever. Parsons becomes CEO Thursday at the company's annual meeting in New York.
Since last year's gathering, AOL Time Warner shares have plunged 67 percent on lower advertising sales and slower subscriber growth at America Online. The Internet business, called the company's "jewel in the crown" by Levin a year ago, is now dragging down the stock, investors said. For Parsons, conditions may get worse before they get better, they said.
``I don't think America Online has hit a bottom yet,'' said Allison Shaw, vice president at asset management firm Independence Investors, a unit of John Hancock Funds, which owns AOL Time Warner shares.
Advertising sales at America Online fell 31 percent in the first quarter, its second straight decline. Ad sales fell 7.1 percent in the fourth quarter.
"Maybe one day it will be the crown jewel, but right now it's desperately in need of help," said Michael Florin, an analyst at US Trust Co, which manages US$93 billion and owned 14.6 million AOL Time Warner shares in March, according to federal filings. One of the "most important things now for Parsons to do is to provide some visibility that the problems at the division can be fixed."
AOL Time Warner shares fell US$00.82 to US$16.98 on Friday. The stock has fallen 47 percent so far this year.
Some investors expressed concern that online ad sales will never return to the record levels of the late 1990s and 2000. And they said America Online may not be able to repeat the success it's had in "dial-up," or Internet connections over regular telephone lines, in the growing market for "broadband," or high-speed Internet service.
"Negotiating the transition from dial-up to broadband is probably the single most important thing for Parsons and his team," said Charles Crane, a strategist at Victory SBSF Capital Management. The firm owns 3.6 million AOL Time Warner shares and manages US$4.5 billion.
That transition involves reaching agreements to run the America Online service over rival companies' cable-TV lines, analysts said. AOL Time Warner owns the second-largest US group of cable systems with about 12.7 million subscribers.
"They need access to cable operators," Florin said. "As [dial-up] customers migrate to broadband, they need to be in a good position to capture that migration. It's one of, if not the most, important issue that AOL Time Warner has right now."
Parsons has said that pushing America Online back on a "growth track" will be among his top goals during his first six months as CEO. He has said he wants to simplify the company's balance sheet and its Time Warner Entertainment partnership with AT&T Corp.
Parsons was trained as a lawyer and worked as a political aide to former New York Governor Nelson Rockefeller and former President Gerald Ford. He was also chairman and CEO of Dime Savings Bank of New York.
Parsons needs to manage investor expectations better than his predecessor. AOL Time Warner has cut its financial forecasts at least three times since the company was formed in January 2001.
National Taiwan University (NTU) yesterday said it disqualified a person from an entrance examination for using AI smart glasses to cheat, along with two others for making untruthful statements in their curriculum vitae. The three applicants were given null scores, Taiwan’s highest-ranked university said, calling on prospective students to be honest in the admissions process. NTU registrar Lee Hung-sen (李宏森) said that the cheating applicant wore a hat and thick-rimmed glasses to the second written exam for medical school, claiming that they felt cold. Suspicions were aroused when the applicant stared oddly at the test for long stretches while steadily bringing the paper
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. Philippine authorities were assessing the damage from the quake, with the office of civil defense seeking to verifying initial reports that 15 people had been killed and 129 injured in the region, mostly from falling debris. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province,
‘GRAY ZONE’ PRESSURE: Beijing’s activities are intended to create the deceitful impression that China has jurisdiction over the area around Taiwan, the CGA said Taiwan’s rights over its territorial waters and exclusive economic zone must not be violated by any country, the Mainland Affairs Council said yesterday, adding that it will not accept any unprovoked actions. The council issued the remarks in response to the China Coast Guard conducting maritime enforcement drills near eastern Taiwan and claiming to fully exercise China’s maritime administrative law enforcement authority. The Coast Guard Administration (CGA) has been closely monitoring the situation and is taking concrete steps to defend the nation’s sovereignty and secure its waters, the council said. China has no sovereign rights over the waters off eastern
Heavy rain is expected to affect parts of Taiwan this week, the Central Weather Administration (CWA) said yesterday as a meteorologist said the active part of the annual plum rain season has started. A stationary plum rain front and southwesterly winds would bring unstable weather and abundant moisture to Taiwan from today for about a week, with the heaviest rainfall forecast for tomorrow and Wednesday, the CWA said. The agency said western and northeastern Taiwan, and mountainous areas in the east and southeast, could expect showers or thunderstorms on those two days, with localized heavy rain possible. Other parts of
RSS