AOL Time Warner nets record loss

AOL Time Warner, the world's biggest media company, will tonight have the dubious distinction of reporting the planet's largest ever corporate loss.

It will reveal that it lost a staggering $50 billion-plus (£34.5bn) in the first three months of this year.

That's the equivalent of the entire gross domestic product of Tunisia or Sri Lanka. The loss is also the equivalent of $1,470 (£1,050) for every one of America Online's 34 million internet subscribers.

The loss is entirely due to new accounting rules which have forced AOL Time Warner to write-off $54 billion of goodwill to reflect the collapse in value of internet companies since the two merged two years ago.

At the time the world's biggest corporate merger was valued at $290 billion.

Since then the share price has fallen from a peak of $62 to $19, cutting the corporate giant's value on Wall Street to less than $85 billion.

The AOL internet business is seen by Wall Street and company insiders as a major drag on the still successful publishing, film and TV empire which is Time Warner. Profits from hit movies Harry Potter and Scooby Doo will be wiped out by the write-off.

Former Mississippi discjockey Robert Pittman, who is chief operating officer, has already been sent to sort out AOL. He gains a new boss next month when Dick Parsons takes over as chief executive from Jerry Levin. The new team has a tough task convincing Wall Street analysts, many of whom are already saying the company should split in two again. Tonight's announcement will be made after share trading closes on Wall Street.