More AOL Time Warner woes
NYT story.

“Investors took Mr. Pittman’s return as confirmation of their worst fears about the America Online division, and AOL Time Warner’s shares fell last week to a low of $19.60 on Thursday, before rebounding slightly on Friday, with unusually high trading volume. Reports surfaced that the Janus fund group, which specializes in rapidly growing companies and AOL Time Warner’s largest shareholder, was selling tens of millions of shares, presumably because it had lost confidence in the company’s growth prospects.

Investors are most worried that technology and the market are passing AOL by. It remains the undisputed king of dial-up Internet access over phone-line modems, called narrowband. But it does not seem to have yet mastered the next generation of high-speed, or broadband, service, which has been dominated by cable systems and phone companies.

Broadband services were supposed to be one of the biggest benefits from the combination with Time Warner, which owns the nation’s second-largest cable company. Lots of Time Warner’s data and entertainment could be offered up over fast digital pipes, according to the deal’s rationale. But there is little to show for this supposed synergy so far. ”