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AOLTW lawsuit motive eyed; shows $1.8 B loss in Q4

Tue, 01/29/2002 - 7:00pm
Anne Kerven

That cynical Gartner Group is back, this time dissing AOL Time Warner's motives in suing Microsoft. A Gartner report released yesterday argues the real motive for the lawsuit is control of users' online presence information.

On Jan. 22, AOLTW's Netscape Communications unit filed a lawsuit against the Redmond, Wash.-based company that alleged Microsoft, which produces the Explorer Web browser, used anticompetitive practices aimed at Netscape's Navigator browser. But Gartner says this latest salvo in the Netscape/Explorer war is focused on derailing "Microsoft's skillful and effective efforts to weave Internet Explorer and the related Widnows Media Player and MSN Messenger technologies into Internet users' daily lives" and eventually to gain access to online transactions and subsequent information.

On that note, despite a $1.8 billion Q4 net loss for parent AOLTW, Time Warner Cable added 144,000 basic subscribers during the year, for a total of 12.8 million by year's end. High-speed data subs more than doubled to 1.9 million, or 10 percent of eligible homes passed and 15 percent of basic subs, the company says. Digital subs grew 1.6 million during the year to an aggregate 3.3 million.

Of those, TWC added 471,000 digital subs in Q4 and 256,000 high-speed data customers.

The cable unit's advertising and commerce revenue grew 44 percent for the quarter, to $231 million, and 32 percent for the year, to $665 million. The company credits the increase from intercompany promotions and ads sold with new-channel launches.

EBITDA fell to 46 percent in Q4, from 48 percent a year ago, because of rising programming costs and other expenses, it says.

Parent AOLTW reported a $1.8 billion net loss, or 41 cents a share, in Q4 compared with a $1.09 billion, or 25 cents a share, net loss a year ago, thanks to a $1.7 billion write-down of investments.

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