In one of Richard Parsons' first management changes at AOL Time Warner Inc.,
America Online Inc. chief Barry Schuler will be heading a new Digital Services
Development Group, charged with developing digital music and home-networking
initiatives.
AOL Time Warner chief operating officer Bob Pittman will take over day-to-day
control of AOL, the narrowband online service.
In sending Pittman back to AOL, Parsons said in a prepared statement: 'Nobody
understands AOL's operations and potential better than Bob Pittman, and no one
is better qualified to manage this business.
He added, 'The challenge facing us at AOL is to improve the performance of
its advertising business in the current advertising slowdown by building on
AOL's unique competitive position and capabilities.'
In a prepared statement, Schuler said the new group 'will create a whole new
generation of digital products for consumers and will help to drive the growth
of AOL Time Warner.'
There is no word how Schuler's group will intersect its
home-networking plans with AOL Broadband, Time Warner Cable or the company's
Internet-protocol-telephony initiative.
UBS Warburg LLC analyst Chris Dixon
said in a research note, 'We view the new changes as a positive change,' and he
raised the possibility that a president could be named at AOL to handle ad-sales
responsibility.
Dixon maintained his strong buy rating on the company with a $42-per-share
price target.
