Double whammy puts AOL in shade

A SHADOW fell over US media giant AOL Time Warner as it faced allegations of accounting irregularities and speculation that chief operating officer Robert Pittman was about to step down.

It is not clear if the two events are connected, but investors were jittery, selling AOL down 6% in early trades. Wall Steet, pummelled in recent weeks after the accounting scandals, was relatively stable, despite the worries.

A former AOL executive alleged the troubled company had used unconventional accounting methods over the last two years to boost internet advertising revenues. The deals, worth £170m, or 2% of AOL's total sales, occurred at a time when doubts were mounting about whether internet advertising would take off.

Pittman ran AOL's online division before the company completed its £67bn merger with Time Warner in 2001. He was sent back to the division in April to revive it as concerns mounted over AOL's slowing growth, accounting methods and strategy.AOL said its accounting methods were appropriate. It would not comment on Pittman.