NEW YORK: There's plenty happening at AOL Time Warner.
The company yesterday sold a key 8.4 per cent stake in Hughes Electronics, the parent company of DirecTV, the largest pay TV satellite broadcaster in the US, that Rupert Murdoch's been eyeing for a long time. 
Outgoing vice chairman Ted Turner The sale, part of AOL Time Warner's strategy to reduce its ?16.25bn debt, came shortly before the media giant announced a massive $44.9 billion fourth quarter loss due to a huge charge for the shrinking value of its America Online unit.The company also announced the stepping down of vice-chairman Ted Turner by May this year.
The annual loss of $98.7 billion for 2002 suffered by AOL Time Warner is roughly equal to the price that America Online paid for Time Warner Inc. in the merger that created the company two years ago. Revenue for the fourth quarter ended 31 December increased eight per cent, to $11.4 billion, from the same period last year, compared with Wall Street estimates of $11.2 billion, reports say.
While earnings before interest, taxes, depreciation and amortization (ebitda) fell 11 percent at the troubled America Online unit, it rose at all the company's other divisions, with 13 percent gains at both its studios and cable operations, a 46 percent rise in its networks, a 25 percent rise in its music division and a 21 percent gain at publishing, say reports. 
Company-wide revenue rose to $11.4 billion from $10.6 billion, as strong box office and DVD sales and improving ad revenue from old line media such as television and magazines overcame declining revenue at AOL. America Online saw a continued decline in revenue due mostly to a long-term fall in advertising and commerce revenue. It also saw a 176,000 decline in the quarter in the number of AOL subscribers in the United States, leaving the service 26.5 million U.S. customers, the first quarterly decline the unit has ever had. 
CEO Richard Parsons told analysts yesterday that efforts to turn around problems at AOL and cut debt and overall costs in the coming year, "will allow us to return to a growth in cash flow and ebitda." 
The New York-based company took a charge of $45.5 billion to reflect the loss of value at its various business units in the quarter, more than twice what some industry analysts had expected. The America Online unit took the brunt of the charge, about $33.5 billion, but the cable operations caused $10.5 billion of that, while the music segment booked $1.5 billion. 
AOL Time Warner, which owns Time magazine, the Warner Bros. movie studio, CNN, CNN/Money and other properties in addition to its troubled AOL online service, had taken a $54.2 billion charge earlier in the year, mostly to reflect the impairment to goodwill on its balance sheet, according to reports.
Turner's stepping down as vice president on the other hand, follows a series of shakeups at the company. AOL Chairman Steve Case had announced earlier in January that he would resign that post in May. 
Hughes, controlled by General Motors, has reached agreements with News Corp and Echostar in the past two years but both deals fell through. AOL Time Warner sold its Hughes holding for about ?500m to US stockbroker Bank of America, which is expected to put the block of shares up for sale. AOL Time Warner's decision to sell the stake now, rather than wait for a value enhancing deal, was read by analysts as a sign the group needs to move urgently to reduce its debt. 
The sale also set off speculation that the media giant does not believe a Hughes deal with either Murdoch or Ergen could come about shortly. The Hughes stake was acquired in 1999 by America Online before its groundbreaking merger with Time Warner. Hughes was to deliver America Online's high-speed internet services to TV sets via satellite as part of the deal.