AOL accounting games boosted revenues

OK, so let's see if the lefty-media piles on lefty AOL like they did with Enron! (I'll believe it when I see it.)

This is a page one article in the Washington Post, with an entire second part to run tomorrow, and you're accusing them of ignoring the story?

My main complaint about AOL is that their free coasters have holes in the middle that leak condensation onto to coffee table.

Lefty wire service Reuters is running with the story. In fact, I'll post it here since it summarizes what is a hideously long WashPost article.

AOL Made Unconventional Deals -Post

Last Updated: July 18, 2002 02:30 AM ET

WASHINGTON (Reuters) - America Online Inc. boosted its revenue figures through unconventional deals from 2000 to 2002, before and after its merger with Time Warner Inc., the Washington Post reported on Thursday. A chart printed in connection with the Post article shows a total of $270.1 million in unconventional deals. The newspaper said it reviewed hundreds of pages of confidential AOL documents and interviewed current and former company officials and their business partners in order to produce the report. According to the Post article: -- "AOL converted legal disputes into ad deals; -- "It negotiated a shift in revenue from one division to another, bolstering its online business. -- "It sold ads on behalf of online auction giant eBay Inc ., booking the sale of eBay's ads as AOL's own revenue. -- "AOL bartered ads for computer equipment in a deal with Sun Microsystems Inc. -- "AOL counted stock rights as ad and commerce revenue in a deal with a Las Vegas firm called PurchasePro.com Inc. "AOL also found ways to turn the dot-com collapse to its advantage, renegotiating long-term ad contracts it risked losing into short-term gains that boosted its quarterly revenue," the Post reported. The accounting and business practices resulted from worries over impending loss of advertising revenue and market unease over the health of Internet companies, the Post said. "In such an atmosphere, and with its takeover of Time Warner Inc. imminent, AOL sought to maintain its breakneck growth in advertising and commerce revenue," the newspaper reported. Robert O'Connor, then vice president of finance for AOL's advertising division, told the Post he outlined concerns in a series of meetings with top executives in 2001 and this year. "Clearly, a lot of what they were living on was revenue that was not of the highest quality. I don't know if they're still in denial, but there were some pretty big business issues they were not willing to face. "For nine months, I tried to get these guys out of denial. I tried to take the perfume off the pig," O'Connor told the newspaper. He resigned in March. In response to the Post investigation, AOL replied that "the deals were handled properly and the company 'maintained a strict and effective system of internal controls."' AOL also told the Post "the total revenue represented by all the deals reviewed by The Post were 'truly microscopic' -- less than 2 percent of AOL's overall revenue, including subscriber fees -- and therefore immaterial to the company's business."

Dumkoph! Those aren't coasters, they're hi-tech sporting clays! (And they work fine!)

:)

LOL! If I'm so dumb, how come I know that it's spelled "Dummkopf"?

Instead of "PULL!", do you yell "EJECT!" ?

Has anyone noticed that the price of one share of AOL Time Warner ($13.11) is now almost half of one month of AOL service ($23.95)? I'd say that's a bit diproportional when its cheaper to buy into the company than it is to buy from it.

And, as a Time Warner employee, this daily drumbeat is starting to take on a life of its own as if somebody *desires* us to be the next Enron. And everytime Ted Turner, who has been unloading shares himself, mouths off again over his anti-Christian, anti-Isreal paranoia, the stock takes still another hit.

This is my 401-K we're joking about here.

Not to mention the fact that the product sucks.

And, as a Time Warner employee...

I'm an ex-TWXer, I know where you're coming from.

This is my 401-K we're joking about here.

You don't have your whole 401(k) wrapped up in AOL stock, do you? That's a very VERY bad idea, no matter what company you work for. In fact, it's best to have as little stock in your own company in your 401(k) as possible, unless it's a stock that truly would deserve purchase on its own if you weren't an employee. And even then you should switch your 401(k) into a guaranteed money market fund once the stock hits a target price, so you can lock in the profits.

This is a page one article in the Washington Post, with an entire second part to run tomorrow, and you're accusing them of ignoring the story?

Perhaps what the poster was getting at is that these same media outlets are small arms of corporate conglomerates, many of whom have expanded via merger and acquisition of late. In that vein, do you think the folks at CNN will pick up the story? Perhaps only after everyone else has it front and center, but they won't lead with it and they would never break the story.

So, it begs the question- what about Viacom, Disney, GE and the other big boys who own our "free" press? Let's look at the books of those who shout out holier than thou at corporate America.

Well, the 401-k is tied into the stock plan. You don't have to invest in the stock but Time Warner was matching your contributions by 67% if you did. That was a wonderful deal until AOL came along.

You can also diversify what's in the 401-k by reallocating some of it to other things and that's what I've done all along. But the new contributions go straight into stock.

AOL Made Unconventional Deals -Post