America Online executives say they have softened their bare-knuckled dealings with advertisers and are taking other steps to revive an ad engine that fueled revenue growth in the late '90s.
The service's sputtering ad sales have weighed down AOL Time Warner's share price. And they played a role last week in the exit of the titan's chief operating officer, Robert Pittman, who came from AOL, and the elevation of Time Warner veterans Don Logan and Jeff Bewkes to split No. 2 duties.
AOL ad and commerce revenue is projected at $2 billion this year, down from $2.7 billion in 2001.
Advertising also was at the center of a Washington Post report last week that said AOL propped up revenue by $270 million in 2000 and 2001 with creative accounting and ad scheduling.
AOL says the accounting was proper and the deals accounted for less than 5% of ad revenue. And Robert Sherman, president of AOL Interactive Marketing, says he has heard no concerns from advertisers about ad placements.