Pittman nets top spot, retains COO title
NEW YORK — AOL Time Warner Tuesday placed Robert Pittman at AOL’s helm, in a move that gives the Internet service provider hands-on attention at a crucial time and offers Pittman a high-profile role after he was passed over for the CEO title at the parent company late last year.
Pittman will remain chief operating officer of AOL Time Warner. Current America Online chief Barry Schuler will move to a new digital services division and report to Pittman.
Move puts Pittman, a seasoned online veteran, back in the saddle at AOL at a critical juncture for the nation’s biggest Internet service. Wall Street is fretting about slow subscriber growth and the rocky rollout of AOL’s high-speed service. ISP ills are weighing on the parent’s stock, which closed at a dismal $21.83 Tuesday –down from a 52-week high near $60.
“We view this news as a signal that the AOL division is in fact more troubled than the recent results or current estimates suggest,” said Lehman Bros. analyst Holly Becker in a report.
The appointment also helps put a lid on speculation that Pittman might ankle AOL TW after his co-chief operating officer Richard Parsons got the nod to replace outgoing CEO Gerald Levin. Pittman’s former boss and AOL founder Steve Case is AOL TW chairman.
“Bob Pittman knows AOL inside and out, upside and down,” said Ken Lerer, an exec VP at the conglom who has worked closely with Pittman for years. “This is a key time in our business, and we’ve got the benefit of having Pittman with an ability to step in and do this.”
Schuler moves to new unit
In its statement Tuesday, AOL Time Warner didn’t elaborate on the role of the new unit Schuler will run. Still unnamed, it is said to concentrate on the “digital household of the future,” or devising ways for AOL TW to wire together consumers’ PCs, stereos, televisions and other appliances via nascent home-networking technology.
Schuler rose through the ranks at AOL after the Internet giant acquired his interactive media company Medior in 1995. He later ran AOL’s Interactive Services Group, including AOL, Netscape and Compuserve, before being named chairman-CEO in early 2001.
Chance for ‘Mr. Fix-It’
Pittman, widely considered AOL TW’s most capable day-to-day operator, takes on the daily challenge of keeping AOL’s 34 million Internet subscribers happy and spurring new growth. “AOL Time Warner is aligning its individual managers with their natural skill sets,” said Chris Dixon, a media analyst at UBS Warburg. “It’s an opportunity for Mr. Pittman to be a little bit of a ‘Mr. Fix-It,’ and given his past track record there’s no reason why he shouldn’t succeed.”
AOL’s Lerer said Pittman will focus on beefing up the Netco’s advertising position as the media industry begins to pull out of a protracted slump in the ad market. AOL’s advertising and commerce revenues slipped 7% in the fourth quarter.
Move follows a series of major lineup changes in recent months. CEO Levin went public last fall with his decision to retire this spring. At AOL, online services boss Jonathan Sacks announced his own retirement in February, quickly provoking rumors that radio veteran Jimmy DeCastro may replace him. Last month, Lisa Hook replaced a beleaguered Audrey Weil at the top of AOL Broadband.
Wall Street also is worried about AOL TW’s upcoming earnings report and the implications of a whopping $54 billion charge the company incurred to write off the excess value of acquisitions.
(Jill Goldsmith in New York contributed to this report.)