Pittman bidding AOLTW adieu

As part of a corporate restructuring at AOL Time Warner Inc. (AOLTW), the company announced Thursday that Robert Pittman, chief operating officer (COO) and interim head of the company's AOL Internet division, will step down.

The departure of Pittman, who hailed from the America Online Inc. (AOL) side of the merged company, is being seen as a clear indicator that the power has shifted, with veteran Time Warner executives taking the reins.

The announcement came following an AOLTW board meeting today, in which the board was expected to discuss an executive shakeup. The company announced that Pittman is stepping down as both COO and as a director of AOLTW, and will leave the company after "completing the transition to a new CEO" at the AOL division. Under the new corporate structure announced today, Don Logan, formerly chairman and chief executive officer (CEO) of Time Inc., becomes chairman of the new Media & Communications Group, comprising America Online, Time Inc. and Time Warner Cable, as well as the AOL Time Warner Book Group and Interactive Video unit. Jeff Bewkes, formerly chairman and CEO of HBO, becomes chairman of the new Entertainment & Networks Group, comprising HBO, New Line Cinema Inc., The WB, Turner Networks, Warner Bros. and Warner Music Group. Logan and Bewkes will report directly to AOLTW CEO Robert Parsons.

Signs of Pittman's imminent exit surfaced several weeks ago when the executive began to complain that pressures to jumpstart the stalled company had become too much for him, according to reports in the Wall Street Journal. Furthermore, AOLTW confirmed Friday that it had hired an executive search firm to help it find a new AOL head. In addition to dealing with a continual decline in AOLTW stock, which has fallen roughly 60 percent since the beginning of the year, Pittman was left to temporarily head America Online (AOL) following the departure of AOL CEO Barry Schuler in April. Beset with slowing subscriber growth and a weak online advertising market, the Internet unit has been seen by analysts as the company's Achilles heel.

The company has undergone a series of executive shuffles since America Online Inc. and Time Warner Inc. merged 18 months ago, but still hasn't seemed to gain a solid footing. In May, Time Warner veteran Richard Parsons took over as AOLTW CEO following the retirement of Gerald Levin.

According to press reports, the company has been undergoing an internal power struggle between the two sides of the merged entity.

Pittman's departure is being seen as a clear victory for the Time Warner faction, which is known for taking a more decentralized view on how the company should be run.

But a game of executive musical chairs isn't the only issue facing AOLTW as it prepares to release its second-quarter results next week. A report published in the online version of the Washington Post Thursday alleges that the company undertook "unconventional transactions" to boost its sales.

AOLTW Spokesman John Buckley denied these charges, however, saying that all the transactions in question adhere to generally accepted accounting principles (GAAP).

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