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EDITIONS
Wednesday, 4 December, 2002, 18:26 GMT
AOL fights revenue slide
Steve Case, chairman, AOL Time Warner
Steve Case: Battle plans

"We will start the war from right here," announced AOL Time Warner chairman Steve Case.

Hundreds of curious investors lined up to register for the long awaited AOL Day early December at the New York Sheraton hotel.

Jonathan Miller, chairman and chief executive, America Online
Jonathan Miller: "We had the wake-up call late"
The promised new strategy of the world's largest internet service provider was about to be disclosed.

"We're not dwelling on the past rather, we're focused on the future," stressed the founder of AOL, before comparing the firm's situation to that of General Teddy Roosevelt Jr - the president's son - when he, a few decades earlier, also went astray.

Mr Roosevelt missed the US-invasion plan of the Normandy and landed down the beach.

"Teddy didn't dwell on how he got there," Mr Case recalled.

"He just adjusted to the new reality and fought on."

(What Mr Case doesn't mention though, is that just weeks after displaying battlefield bravery at the beaches of Normandy - which earned him the Medal of Honor - General Roosevelt died of a heart attack).

'Must have' item

Don Logan, named chairman of AOL's media & communications group, continued the battle theme.

"We are going to turn this big battleship around," said Mr Logan.

AOL Time Warner chief executive Richard Parsons took a less belligerent tack.

"We intend to create a product offering that online consumers simply can't live without," Mr Parsons told investors, before leaving the floor to his colonels.

As usual, Mr Parsons preferred to work behind the scenes.

But the firm's other top executives were lined up in the first row of the Imperial Room, demonstrating unity, power and determination in a firm once seen split between its AOL arm and the Time Warner business.

Mr Parsons is seen as determined to make the company work, almost at any cost, in order the meet to promise of the merger.

"We had the wake up call a little bit late," admitted Jonathan Miller, head of the AOL arm.

Backlash

After the "biggest deal in history" was announced about three years ago, some AOL executives behaved like conquerors, ignoring the fact that there was no eternal growth in the highly profitable dial-up business and in ad revenues.


Our secret weapon is the largest online community in the world

Jonathan Miller, chief executive, American Online

The announcement that solid growth in worldwide subscription revenues would be offset by declines of 40-50% in advertising and commerce revenues in 2003 caused a stock price backlash.

American Online's full-year 2002 revenues would range between $8.8bn and $9.0bn.

And for 2003 the company said it expected another decline in revenues.

"It is a new day," Mr Case told investors.

'Secret weapon'

The AOL executives showcased their new strategy, determined to fight competitors such as Bill Gates.

"Our secret weapon is the largest online community in the world," Mr Miller said.

And to serve them better, the content of Time Warner outlets such as Time magazine and CNN video content is being offered to AOL users.

AOL users are supposed to be the first to know about what is happening in the world, the first to see new movie and video clips.

And AOL customers, who often have only one phone line, now longer have to be afraid of missing a phone call while they are surfing the web.

"Call alert costs only $4 a month a steal," Don Logan said.

He added that he was not afraid that AOL's new broadband services would steal customers from the highly profitable dial-up operations.

The firm has set its sights on winning customers from rival broadband providers, through pricing and content offers.

"We are only just beginning to make a product and content improvement."

See also:

03 Dec 02 | Business
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15 Aug 02 | Business
06 Aug 02 | Business
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