AOL COO quits; report says company financials murky

After days of rumours about management changes, AOL Time Warner chief operating officer Robert Pittman resigned amid a flurry of new executive appointments at the New York-based media company.

          After days of rumours about management changes, AOL Time Warner chief operating officer Robert Pittman resigned amid a flurry of new executive appointments at the New York-based media company.

          The resignation followed published reports that he was poised to quit and that the company has made some "unconventional transactions" to boost sales.

          Pittman's departure was announced by CEO Richard Parsons, who said Pittman would also step down as a director of AOL Time Warner.

          In April, Pittman had been tapped to lead America Online to replace chairman and CEO Barry Schuler, who stepped down to pursue another job in the Dulles, Virginia-based company. Pittman had worked for AOL before its merger with Time Warner.

          At the time, Parsons said, "Nobody understands AOL's operations and potential better than Bob Pittman, and no one is better qualified to manage this business."

          In a statement Pittman said: "I've decided that after a new CEO is in place at AOL, I won't return to AOL Time Warner as chief operating officer. ... It's time to take a break."

          Pittman's decision was one of several management moves announcement by AOL Time Warner after markets closed on Thursday (US time).

          Don Logan, formerly chairman and CEO of Time, will become chairman of the new Media & Communications Group, comprising America Online, Time and Time Warner Cable, as well as the AOL Time Warner Book Group and Interactive Video unit.

          Jeff Bewkes, formerly chairman and CEO of HBO, becomes chairman of the new Entertainment & Networks Group, comprising HBO, New Line Cinema, The WB, Turner Networks, Warner Bros and Warner Music.

          They will report directly to Parsons.

          According to a Wall Street Journal article before the resignation announcement Pittman had been increasingly vocal about his unhappiness in the position over the last few weeks, noting the mounting pressure placed upon him to jump start the unit's growth.

          Meanwhile, the Washington Post reported in its online edition on Thursday that in order to make up for a slump in the internet advertising market, AOL boosted its revenue "through a series of unconventional deals."

          According to the Post, AOL converted legal disputes into ad deals, shifted revenue from one division to another and sold ads on behalf of eBay and booked the revenue as its own, among other unusual practices.

          The Post cited its own review of hundreds of confidential AOL documents, as well as interviews with former company officials and business partners.

          According to the Post, AOLTW issued a statement yesterday dismissing accusations of accounting irregularities, saying that all the transactions the paper discussed were "appropriate and in accordance with GAAP (generally accepted accounting principles)."

          Despite AOLTW's assurances, the company's stock (AOL) dipped in premarket trading on Thursday (US time).

          Computerworld US' Ken Mingis contributed to this report.

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