Street split over AOL's executive decision

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NEW YORK -- Shares of Time Warner Inc. hit a new 52-week high Thursday even though some Wall Street analysts were confounded by the sudden replacement of AOL chairman and CEO Jonathan Miller with NBC Universal veteran Randy Falco.

The stock closed up 1.8% at $20.33 after going as high as $20.52 in intraday trading. Its previous 52-week high stood at $20.13.

Sources confirmed Thursday that Miller -- who didn't know about the management change ahead of time -- does not have plans for his next career step, and that Falco will have to address potential morale issues tied to the reshuffle.

An AOL spokesman Thursday declined comment on the executive change beyond saying that Miller will remain in place through a transition period, which is expected to be completed by year's end. However, no date has been set for Falco's start or Miller's last day.

Bear Stearns analyst Spencer Wang said in a research report Thursday that he was "disappointed" by Miller's departure, calling him "a strong executive who steered AOL through arguably one of the most tumultuous times in corporate history."

Other industry watchers have called Miller's track record at AOL mixed, citing several changes of strategy during his four-year tenure.

"His successor appears to have little Internet experience," Wang argued. "Although Mr. Falco has had a long career in the media business, it appears that his main focus over the last 10 years has been in TV."

Others on Thursday lauded Falco's background as key, citing previous market talk that TW brass felt Miller wasn't aggressive enough in trying to make AOL more competitive with other big Web players.

"While Falco evidently has no previous experience at the helm of a major Internet company, we note his extensive ad background and that he was instrumental in NBC's own recent push into online ads," Standard & Poor's Equity Research analyst Tuna Amobi wrote in a note to investors.
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