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1/19/2003

You’ve got controversy

Times-Call wire services

Not so long ago, America Online was an investor’s darling.

The company was growing and adding subscribers.

Then it joined with Time Warner, and the honeymoon went sour.

Outgoing AOL Time Warner Chairman Steve Case acknowledged Monday that the 2001 merger he helped orchestrate has not lived up to expectations, but he said he remains confident that the marriage of Time Warner and America Online will prove sound over the long run.

Investors welcomed Case’s resignation, but analysts warned that many questions and doubts remain about the giant media company’s prospects.

By making Dick Parsons its chairman as well as chief executive, AOL Time Warner is banking that his consensus-building skills can save the media empire created by merger two years ago.

Problems have plagued the company almost since America Online and Time Warner joined, and on Thursday its board of directors unanimously elected Parsons to replace Case.

Parsons was chosen, analysts say, because of his ability to juggle multiple divisions and his hands-on approach to solving problems.

AOL Time Warner is facing, most notably, a more than 60 percent decline in its stock price, which has enraged investors.