Former Head Of Key Unit At AOL Leaves

Zardon · Aug 15, 2002, 06:47 AM

The former chief of America Online's business affairs unit -- which crafted several unconventional advertising deals that spurred twin federal investigations -- left the company late last week, a company spokesman confirmed.

David M. Colburn was ousted on Friday and locked out of his office at the company's Dulles headquarters, according to sources familiar with the situation. The company would not say whether Colburn quit or was fired, nor would it discuss the reasons for his departure.

Colburn's unit was in charge of negotiating and structuring many of AOL's largest deals. He was involved in several advertising and commerce transactions that have led to probes into the company's accounting by the Securities and Exchange Commission and Justice Department.

America Online's business affairs unit sought to generate advertising revenue by such methods as selling ads for online auctioneer eBay and booking the revenue from the sale of eBay's ad space as AOL's own revenue.

America Online and Richard D. Parsons, chief executive of parent company AOL Time Warner Inc., have said the deals were booked according to generally accepted accounting principles and reviewed by the company's outside auditor, Ernst & Young LLP. Parsons said the company would cooperate with federal investigators.

Colburn was forced out only days after AOL named a new chief executive -- media veteran Jonathan F. Miller. Colburn's exit also came just before today's SEC deadline for corporate executives to vouch for their accounting statements.

Late last month, the company relieved Colburn of his day-to-day responsibilities for business affairs and shifted him to a position where he would work on strategy and broader issues.

Lance Conn was appointed to take over the day-to-day operations of the business affairs unit, but an America Online source said yesterday that the current structure of the unit probably will not stay as it is.

"It's still relatively fluid," the source said. "It will evolve a little bit."

Colburn is a lawyer, ex-venture capitalist and former chief executive of a poster company. At AOL, he led a unit of about 100 dealmakers who brokered hundreds of millions of dollars in advertising and commerce contracts. Colburn declined to come to the door at his Potomac home but told a reporter through his intercom that he had no comment.

Several of the unconventional business deals executed under Colburn were chronicled in a series of articles last month in The Washington Post. After the stories appeared and the federal government began looking into the deals, many AOL employees assumed Colburn would leave soon, an AOL source said yesterday. His departure was not widely known among rank-and-file employees.

Colburn organized a weekly basketball game on Sundays at his home for employees. An e-mail circulated at America Online late last week announced that last Sunday's game would be canceled.

At AOL, Colburn could be a demanding boss, but he also rewarded his troops with expense-paid trips and other bonuses. Personally, he lavished money on his family.

He hired superstar boy band 'N Sync to play one daughter's 2000 bat mitzvah and pop star Dave Matthews to play a second daughter's 2001 bat mitzvah, which was held in a rented-out Union Station. Reports at the time estimated the cost of the 2000 bat mitzvah to run as high as $1 million.

Miller, AOL's new chief, was at AOL's Dulles headquarters late last week when Colburn left and is on vacation this week. One source familiar with the details of Colburn's departure said America Online's new management had a direct hand in his ouster.

"There's a new sheriff in town," said another AOL source. Added a third: "They're cleaning house."

On the Dulles campus, employees are wondering who's next. Any executive who had been brought in by Robert W. Pittman -- former AOL Time Warner chief operating officer, who left the company last month -- is considered vulnerable, said one company employee.

The online unit has lately been the problem child of AOL Time Warner, the world's largest media company. Though many of the company's other assets are performing well -- including Warner Bros. music and pictures, many of the Time Inc. publications and HBO -- America Online has faced flattening subscriber growth and crashing advertising revenue over the past year in the wake of the burst Internet bubble and a generally bad year in advertising. The company's stock price closed yesterday at $10.80 per share, down 20 cents.

Today is the deadline set by the SEC for corporate chiefs to verify their company's accounting statements, a measure passed in response to the many corporate scandals of the past several months.

AOL Time Warner said it would wait until today to announce if Parsons would sign the company's accounting statements, verifying their accuracy. washington post

Greebo_x · Aug 15, 2002, 08:42 AM

I think all of the 'revelations' about 'questionable' accounting at AOL are small compared to some of the shoddier practices that the company was FOUNDED on. I was one of the very first subscribers, way back in the days when it was brand-new and exciting; within a month, the response time for the service got so bad that I gave up and canceled- I also wrote a nasty letter to them. A month later, I got a letter from their CEO begging me to return and promising that the overselling of their service to too many subscribers was a temporary situation and that they would NEVER let it happen again. I decided to give them one more shot and, sure enough, after a month the response time was in the pits again....

Personally, I think all AOL executives deserve to rot in a special level of hell, where the souls of all the people who ever received "free offers" from them would get to shove the floppies and CDs deeply up the executives' collective a$$es!

(Okay, the flame is over...)

Aug 15, 2002, 06:47 AM	#1
Zardon DriverHeaven Founder Join Date: May 2002 Posts: 32,480 Rep Power: 179	Former Head Of Key Unit At AOL Leaves The former chief of America Online's business affairs unit -- which crafted several unconventional advertising deals that spurred twin federal investigations -- left the company late last week, a company spokesman confirmed. David M. Colburn was ousted on Friday and locked out of his office at the company's Dulles headquarters, according to sources familiar with the situation. The company would not say whether Colburn quit or was fired, nor would it discuss the reasons for his departure. Colburn's unit was in charge of negotiating and structuring many of AOL's largest deals. He was involved in several advertising and commerce transactions that have led to probes into the company's accounting by the Securities and Exchange Commission and Justice Department. America Online's business affairs unit sought to generate advertising revenue by such methods as selling ads for online auctioneer eBay and booking the revenue from the sale of eBay's ad space as AOL's own revenue. America Online and Richard D. Parsons, chief executive of parent company AOL Time Warner Inc., have said the deals were booked according to generally accepted accounting principles and reviewed by the company's outside auditor, Ernst & Young LLP. Parsons said the company would cooperate with federal investigators. Colburn was forced out only days after AOL named a new chief executive -- media veteran Jonathan F. Miller. Colburn's exit also came just before today's SEC deadline for corporate executives to vouch for their accounting statements. Late last month, the company relieved Colburn of his day-to-day responsibilities for business affairs and shifted him to a position where he would work on strategy and broader issues. Lance Conn was appointed to take over the day-to-day operations of the business affairs unit, but an America Online source said yesterday that the current structure of the unit probably will not stay as it is. "It's still relatively fluid," the source said. "It will evolve a little bit." Colburn is a lawyer, ex-venture capitalist and former chief executive of a poster company. At AOL, he led a unit of about 100 dealmakers who brokered hundreds of millions of dollars in advertising and commerce contracts. Colburn declined to come to the door at his Potomac home but told a reporter through his intercom that he had no comment. Several of the unconventional business deals executed under Colburn were chronicled in a series of articles last month in The Washington Post. After the stories appeared and the federal government began looking into the deals, many AOL employees assumed Colburn would leave soon, an AOL source said yesterday. His departure was not widely known among rank-and-file employees. Colburn organized a weekly basketball game on Sundays at his home for employees. An e-mail circulated at America Online late last week announced that last Sunday's game would be canceled. At AOL, Colburn could be a demanding boss, but he also rewarded his troops with expense-paid trips and other bonuses. Personally, he lavished money on his family. He hired superstar boy band 'N Sync to play one daughter's 2000 bat mitzvah and pop star Dave Matthews to play a second daughter's 2001 bat mitzvah, which was held in a rented-out Union Station. Reports at the time estimated the cost of the 2000 bat mitzvah to run as high as $1 million. Miller, AOL's new chief, was at AOL's Dulles headquarters late last week when Colburn left and is on vacation this week. One source familiar with the details of Colburn's departure said America Online's new management had a direct hand in his ouster. "There's a new sheriff in town," said another AOL source. Added a third: "They're cleaning house." On the Dulles campus, employees are wondering who's next. Any executive who had been brought in by Robert W. Pittman -- former AOL Time Warner chief operating officer, who left the company last month -- is considered vulnerable, said one company employee. The online unit has lately been the problem child of AOL Time Warner, the world's largest media company. Though many of the company's other assets are performing well -- including Warner Bros. music and pictures, many of the Time Inc. publications and HBO -- America Online has faced flattening subscriber growth and crashing advertising revenue over the past year in the wake of the burst Internet bubble and a generally bad year in advertising. The company's stock price closed yesterday at $10.80 per share, down 20 cents. Today is the deadline set by the SEC for corporate chiefs to verify their company's accounting statements, a measure passed in response to the many corporate scandals of the past several months. AOL Time Warner said it would wait until today to announce if Parsons would sign the company's accounting statements, verifying their accuracy. washington post

Aug 15, 2002, 08:42 AM	#2
Greebo_x Keeper of Obscure Knowledge Join Date: May 2002 Location: Palo Alto, CA Posts: 91 Rep Power: 0	It's about time! I think all of the 'revelations' about 'questionable' accounting at AOL are small compared to some of the shoddier practices that the company was FOUNDED on. I was one of the very first subscribers, way back in the days when it was brand-new and exciting; within a month, the response time for the service got so bad that I gave up and canceled- I also wrote a nasty letter to them. A month later, I got a letter from their CEO begging me to return and promising that the overselling of their service to too many subscribers was a temporary situation and that they would NEVER let it happen again. I decided to give them one more shot and, sure enough, after a month the response time was in the pits again.... Personally, I think all AOL executives deserve to rot in a special level of hell, where the souls of all the people who ever received "free offers" from them would get to shove the floppies and CDs deeply up the executives' collective a$$es! (Okay, the flame is over...) __________________ ============================= Athlon XP1700+ CPU SiS730s based PCChips M810lmr v7.0a MoBo ATI All-In-Wonder 8500dv Win2kPro