AOL Struggles Continue

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AOL Time Warner Inc. reiterated revenue and cash-flow guidance for the third
quarter but pulled back forecasts at its America Online Inc. Internet unit due
to continued softness in online advertising.

The company said in a prepared statement that for the full year, advertising
and commerce revenue at the AOL unit was tracking at between $1.6 billion and
$1.7 billion. AOL had previously expected advertising and commerce revenue to
come in at the low end of a range of between $1.8 billion and $2.2 billion.

Cash flow at the Internet division is expected to be between $1.7 billion and
$1.8 billion.

But the company said performance at its other divisions is strong, and it
continues to expect full-year cash-flow growth at the low end of the previously
announced 5 percent to 9 percent range and full-year revenue growth within the
previously announced 5 percent to 8 percent range.

For the third quarter, the company expects revenue growth in the
mid-single-digits and cash-flow growth to be down by low-single-digits compared
with the same period in 2001.

AOL Time Warner stock was down nearly 3 percent, or 39 cents each, in
afternoon trading Monday to $12.74 per share.