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AOL Time Warner changes its name to `Time Warner'

"[The name change will end] any confusion between our corporate name and the America Online brand name."

AOL Time Warner chief executive Richard Parsons

Trapped in a troubled marriage, but not wedded to its name, AOL Time Warner decided on Thursday to return to its maiden name, dropping the first three letters.

The company will now be called Time Warner, an attempt to erase a big reminder of the excesses of the Internet era, America Online's acquisition of Time Warner for shares priced at the peak of the boom.

The name change, which was widely expected and which was approved by the board, is intended to end "any confusion between our corporate name and the America Online brand name," according to an internal memorandum from Richard Parsons, the company's chief executive. The company said it expected to begin the name change process over the next several weeks. In addition to the name change, its stock ticker symbol will change to "TWX" from "AOL."

The decision will carry a literal cost to the company in the form of changing signs, including those at its nearly completed headquarters at Columbus Circle in New York. But it will also increase the potential risks to the venerable Time Warner brand name. The Securities and Exchange Commission and the Justice Department are investigating the company's accounting from around the time of the merger. If the inquiries tarnish the company's reputation, it will no longer have the ballast of the AOL name to throw overboard.

Executives close to Parsons said previously that he had thought that was one reason to hold on to the AOL name, at least for the time being.

But removing AOL from the name was a longstanding water cooler fantasy of shareholders and executives who came from Time Warner before the merger.

With their portfolios and retirement accounts shattered, many still wish for a buyer that would take the America Online division for anything close to the value assigned to it at the time of the merger. That, however, is highly unlikely now that the division's subscribers are defecting and its online advertising revenue continues to plummet. AOL Time Warner executives have said they hope it will turn around next year. Parsons said in Thursday's memo that "America Online is delivering on our financial outlook, including the generation of US$1 billion of free cash flow for the year, and is moving forward on the new strategic plan it announced last December."

The last potential obstacle to removing AOL from the name was concern for the morale of the staff of the America Online division. That obstacle was removed a few months ago when Jon Miller, who was named chief executive of the division last year, requested the name change.

In a twist that surprised the many executives from the other divisions who had blamed AOL for the company's problems, Miller asserted that the division was suffering by association with its parent company's travails, including the accounting investigations, sales of assets, lower debt and executive disputes. Parsons wrote in his memo detailing the company's progress that "we've also devoted a good deal of attention to revitalizing company morale."

Several senior executives said that Miller's formal request to remove AOL from the parent company's name also had the virtue of falling on receptive ears. These senior executives said that for Parsons and other directors, taking this step was just a matter of time.
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