- The Washington Times - Wednesday, August 7, 2002

From combined dispatches
AOL Time Warner Inc. named former USA Interactive Inc. executive Jonathan Miller chairman and chief executive of America Online yesterday as the Sterling, Va., Internet unit struggles to revive advertising growth.
Mr. Miller, 45, will be responsible for all of AOL's businesses, including the flagship online service, the company said. He will report to AOL Time Warner magazine chief Don Logan, who also oversees the company's Internet, cable and book units. Mr. Miller's appointment is effective immediately.
Mr. Miller, who replaces Bob Pittman, must rejuvenate AOL's ad sales and customer growth, and restore investor confidence in the unit's finances, investors said. The Securities and Exchange Commission and Justice Department are investigating AOL's accounting, contributing to a 69 percent drop in the parent company's share price this year.
Mr. Miller said his focus will be on making AOL's existing customers more profitable for the company and that he plans to move to Northern Virginia.
When AOL, the world's biggest Internet company, agreed to buy Time Warner Inc. in January 2000, executives said the online business would boost the combined company's earnings by more than 30 percent a year.
The company now says the increase could be as small as 5 percent this year because of lagging sales at AOL, which have declined for three straight quarters.
Investors say they are worried that the unit will start losing customers to rivals, especially once high-speed Internet service becomes more widely available.
AOL is undeterred. The company announced yesterday that it had purchased 70 acres adjacent to its Loudoun County campus so it would have the option to expand.
AOL spokes-man Nicholas Graham said the company "want-ed to have the flexibility to preserve future options for expansion" and wants to "control in a positive way the development surrounding the Dulles campus."
Mr. Graham said there are no current plans for expansion.
AOL employs 3,700 workers at its 150-acre campus, where it will have 1.6 million square feet of office space in September when a new office building opens. Yesterday's purchase would give the company the space to add another 1.1 million square feet.
Mr. Miller had been head of the information and services group at USA Interactive, the Internet company run by Barry Diller. Mr. Miller oversaw profitable Web businesses such as Hotels.com, an online hotel-reservation business, and Expedia.com, a travel Web site. Before that, he was an executive at Viacom Inc.'s Nickelodeon, the top-rated children's cable-TV network.
The top job at America Online has been vacant since last month, when Mr. Pittman, the interim CEO and also chief operating officer at AOL Time Warner, left the company. He had been president of AOL before the merger.
Mr. Miller joins AOL as the unit is in the middle of two federal inquiries. Last month, AOL Time Warner said the Justice Department and the SEC started investigating AOL's accounting.
AOL Time Warner has said it will cooperate with the investigations, and that the company's accounting is appropriate and in line with generally accepted accounting principles.
Shares of New York-based AOL Time Warner slipped 5 cents to $9.90 yesterday on the New York Stock Exchange.

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