The formula for success now reads this way:
AOL Time Warner---------------- = Time Warner AOL
Today's Washington Post says AOL Time Warner (NYSE:AOL) executives will vote tomorrow to cancel out the greatly diminished AOL name, change its logo, and revert back to its old "TWX" Time Warner ticker.
Though it amounts to an admission that the $112 billion merger was a dismal failure, sources told the Post that the name change does not signal a spinoff of the America Online unit. Sure, a business slowdown and accounting troubles have been a big embarrassment to the Time Warner side, but AOL last year did contribute more than $2 billion in operating income (not including non-cash charges), after all. And that means something to a company that's trying to reduce debt and get rid of some money-losing enterprises.
Today's news is far from a surprise. The name change has been talked about for months, and America Online chief Jonathan Miller actually requested it of AOL Time Warner Chairman Richard Parsons last month. "As AOL Time Warner became known as, for all intents and purposes, 'AOL,'" he wrote in a memo, "any controversy or criticism involving the corporate entity has actually hit our consumer brand."
Hm. Well, we'll see if a name change strengthens the brand. But a much simpler approach would be to clear up its accounting matters with the SEC and get that investigation behind it.
