AOL Time Warner picks chief to also be chairman

NEW YORK -- AOL Time Warner Inc. chief executive Dick Parsons was tapped Thursday to be the media conglomerate's new chairman, giving him broadened authority as he tries to turn the company around.

The board's unanimous decision to have Parsons replace Steve Case, the America Online co-founder who said last week he is stepping down as chairman, completes a shake-up begun a year ago. It caps a heady rise in power for the quiet-spoken Parsons, who took over as chief executive just eight months ago, and marks the victory of old media over new media in the company's reformation.

"This is the final acknowledgment that the AOL-Time Warner combination was a poorly orchestrated merger and now the entire new management team that's been put in place over the last 12 months can move ahead," said Mark May, media analyst at Kaufman Bros. "This has been a wholesale shift from AOL people back to Time Warner people."

Parsons' appointment will take effect May 16 at the annual shareholders meeting, the date Case said he would step down. Case said he thought his continued presence would be a distraction as the company tries to recover from its terrible run since the merger. He will remain on the board.

"It's a company that needs some healing and they needed somebody who plays well with others, and Dick has shown that he does that," said Jonathan Gaw of market research firm IDC. "He's a peacemaker, he's the kind of guy that brings people together."

Before becoming chief executive in May, Parson was AOL Time Warner's co-chief operating officer. He had been named president of Time Warner in 1995, after joining the board of directors in 1991.

"I am highly gratified that the board shares my determination to maximize AOL Time Warner's tremendous potential," Parsons said. ". . . I will work together with the extraordinary people in this company to focus on increasing value for our customers and our shareholders."

Investors had pushed for the changes after a sharp drop in the company's stock price chiefly caused by problems at the America Online division, including shrinking revenues and an investigation into accounting practices.

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