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Last Updated: Thursday, 18 September, 2003, 18:24 GMT 19:24 UK
AOL Time Warner drops 'AOL'
AOL.com
Media giant AOL Time Warner its to abandon the AOL prefix to its name, in a symbolic reversal of the mega-merger which created the firm.

After the name change, which is to be phased in over the next few weeks, the world's biggest media and entertainment firm will once again be known simply as Time Warner.

The move comes three and a half years after Time Warner merged with America Online (AOL), a tie-up which the two firms had hoped would generate huge returns by distributing Time Warner's films and music over AOL's global internet network.

But the subsequent collapse of the internet bubble wiped out much of AOL's market value, ensuring that the much-hyped combination never yielded the promised results.

Disappointment

The merger has also been hampered by a culture clash between AOL's new media executives and their more traditional counteparts at Time Warner, as well as a poor performance from the online division in the years since the two companies joined forces.

AOL is a very unattractive tail on a very beautiful dog
Larry Haverty, State Street Research
AOL, while still profitable, has been losing subscribers and is facing a regulatory inquiry into its accounting.

"We believe that our new name better reflects the portfolio of our valuable businesses and ends any confusion between our corporate name and the America Online brand name for our investors, partners, and the public," said Time Warner chief executive Richard Parsons.

While Time Warner executives are thought to have favoured dropping the AOL prefix for some time, the name change strategy acquired added momentum when AOL's own boss, Jonathan Miller, threw his weight behind it last month.

Mr Miller was neutral in the feud between AOL and Time Warner executives, having been brought in after the original merger to overhaul the company's online activities.

Analysts welcomed the company's change of identity.

TWX returns

"AOL is a very unattractive tail on a very beautiful dog," said Larry Haverty at State Street Research in Boston.

"It's the best possible thing for a shareholder - admit your mistake and move on."

The change of name will affect the firm's logos, brands, and even its stock market ticker symbol, which will revert from 'AOL' to 'TWX.'

However, with AOL now showing signs of getting back on its feet after a difficult two years, a formal demerger does not appear to be on the cards.

"They've gone through the brunt of the pain, and it makes no sense to spin it off now," said Merrill Lynch analyst Jessica Reif Cohen.




WATCH AND LISTEN
The BBC's Kate Noble
"The merger has come to represent what went wrong with the dot-com boom"



SEE ALSO:
AOL pleads for name change
11 Aug 03  |  Business
AOL faces investor lawsuit
20 Jul 03  |  Business
AOL sells CD making unit
18 Jul 03  |  Business
AOL offers rare note of cheer
23 Apr 03  |  Business
AOL puts China deal on ice
26 Mar 03  |  Business
Analysis: AOL's tough challenges
30 Jan 03  |  Business
AOL Time Warner reports $100bn loss
30 Jan 03  |  Business


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