RealTime IT News

AOL-TW to Drop AOL From Name

The board of directors of AOL Time Warner is planning to vote yes on nixing AOL from the corporate nameplate when it meets Thursday, a person familiar with the situation told internetnews.com.

The change would signal that AOL Time Warner is repositioning itself in the media world after a turbulent three years that followed the historic merger of the world's largest ISP, AOL, and the Time Warner media conglomerate. AOL's well-documented troubles include plummeting ad revenues following the bursting of the dot-com bubble and ongoing regulatory probes of how it booked ad deals during the dot-com heyday.

The name change proposal certainly isn't new. Indeed, the idea has been batted around by analysts and company insiders for months, especially since the abrupt resignation in January of AOL Time Warner's chairman, and then-embattled founder of AOL, Steve Case.

Despite AOL's ongoing struggles, such as 1.2 million fewer narrowband subscribers since last year, and the flattening-out of its ad-related revenues left over from the dot-com heyday, the name change is not about AOL's future with the media giant, this person said.

The move is more about removing any brand confusion among subscribers, investors or the general public, as may arise when there's reference to AOL Time Warner's corporate decisions, such as its recent sale of its interest in sports teams, the source said.

A spokesperson for AOL Time Warner refused comment on the board's plans.

The Time Warner side of the corporate house has been divesting some of its "non-core" holdings, such as its interests in sports teams, as part of its plan to trim the parent company's estimated $24 billion debt.

The name change would come as AOL prepares to roll out its next client, AOL 9.0 Optimized, which officials of the ISP have called the most ambitious and important upgrade in the history of the company.

A person familiar with the company's plans told internetnews.com that the official launch is slated for Oct. 12th, after a special release in New York slated for Sept. 24th as part of a free concert in New York's Central Park by the Dave Matthews band that AOL is helping to sponsor.

New York's Mayor Mike Bloomberg recently announced that AOL would donate at least $1 million to New York City schools as part of the "Dave Matthews Band in Central Park - The AOL Concert for Schools" event.

As it readies its launch, AOL is looking to grow its broadband base while managing the continued erosion of its 23-million member domestic narrowband base as broadband becomes more widely available and customers switch to other high-speed access providers. New features available for narrowband subscribers include exclusive content, anti-virus protection and improved surfing speeds. Company officials have also said they plan to carefully manage costs and find more sources of revenues from the company's dial-up base such as premium, add-on services.

Other new features slated to roll with AOL's 9.0 version is AOL Latino, a new service aimed at U.S. Hispanics, and a separate service geared entirely for kids, primarily those in the 6-12 age range.

Called KOL, the newer customized version of the AOL service is an extension of the Kids Only Channel that is quite popular with subscribers, AOL executives said. The new KOL service is being offered to subscribers in the next AOL 9.0 version free of charge and is accessed through the parental controls features in the AOL client.

In recent weeks, analysts that have been critical of AOL's past performances have turned upbeat about the ISP.

For example, Jessica Reif Cohen, Merrill Lynch's media analyst, wrote in a 46-page note about AOL Time Warner in July that AOL has "made impressive strides on a number of levels and has accelerated the pace at which it has addressed several key issues," such as strengthening its balance sheet, "right-sizing" AOL's cost structure and renewing focus on advertising, "particularly high growth sponsored-search."

AOL Time Warner officials said during a second quarter earnings discussion that they see signs that AOL's ad business is stabilizing.