Two executives from the Time Warner side of the company will also be elevated to senior positions as part of the new operating structure, the company announced in a statement.
Home Box Office Chairman and Chief Executive Officer Jeff Bewkes will be promoted to run a new entertainment and networks group, and Time Inc. Chairman and CEO Don Logan becomes chairman of a new media and communications group.
The company's announcement came the same day the Washington Post published a report questioning its accounting practices, which it said involved various swaps and trades with partners which bolstered the company’s 2000 and 2001 advertising revenues to the tune of $270 million.
America Online has battled declining advertising revenue in recent months. Ad sales dropped 31 percent in the first quarter of 2002 after falling 7 percent in the fourth quarter of 2001.
AOL Time Warner has been hard hit by the troubles of its online division, twice downgrading its profit forecasts in the past year. Its stock has dropped 72 percent in the last year to a 52-week low of $12.04 at the beginning of the month.
Pittman, a college dropout, worked his way up to become CEO of AOL before its acquisition of Time Warner in January 2001. After the merger, he ran the new company’s online division, and in May 2002 he was made COO of the merged corporation.
Pittman was one of the key proponents of the merger, promising high levels of growth that never materialized, and speculation has abounded in recent weeks that Pittman was unhappy with pressure from AOL Time Warner senior management.
Pittman will resign as both a director and COO of AOL Time Warner after completing the transition to a new chief executive officer for the America Online division, the company said in its statement.
AOL Time Warner stock dropped 0.66 to close at 12.45 Thursday.
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