America Online Reorganizes to Lead Next Chapter of Internet's Growth.

Business Editors/Hi-Tech Writers

DULLES, Va.--(BUSINESS WIRE)--Aug. 21, 2001

Further Leverages AOL Time Warner Synergies to Accelerate

Next-Generation Interactive Services for Consumers and Create New

Value for Advertising and Commerce Partners

More Tightly Integrates AOL's Multiple Online Brands

to Drive Continued Growth

America Online, Inc. today announced a reorganization that further leverages synergies gained through the AOL Time Warner merger and more tightly integrates its multiple online brands and Web properties to capitalize fully on emerging growth opportunities as the Internet enters a new broadband era.

This new structure will accelerate the company's momentum by creating more valuable opportunities for commerce partners, and speeding the delivery of next-generation AOL products and features and of unified Web-based services that will provide greater convenience to consumers.

To drive continued growth, the reorganization builds on the success of the structure put in place at the completion of the AOL Time Warner merger in January. It also reflects ongoing efforts by AOL Time Warner to operate all of its divisions in a converged, integrated way, as underscored by its recent creation of the Interactive Video division and the Global Marketing Solutions group.

Highlights of the America Online reorganization include:

-- Creating a new AOL Interactive Services Group, with Jonathan Sacks as
President, which will include the flagship AOL service as well as our local
Digital City business.

-- Consolidating the Company's Web brands into a new AOL Web Properties Group,
with Jim Bankoff as President, comprising the Netscape, CompuServe, Moviefone,
MapQuest, ICQ and AOL Instant Messenger services, as well as coordinating the
integration of online properties from across AOL Time Warner.

-- Enhancing our focus on partner service through the Interactive Marketing
Group, with Robert Friedman as President, whose function is to generate
marketing partnerships and sales revenues for all of the AOL brands and
properties, as well as the new AOL Time Warner Global Marketing Solutions
Group.

-- Establishing a new Vertical Markets Group as part of AOL Interactive
Services, with Donn Davis as President, that will create new programming and
cross-brand advertising and commerce opportunities in 10 key areas such as
music, entertainment, personal finance, autos, travel, and others.

-- Expanding the role of the AOL Broadband Group, with Audrey Weil as
President, to drive consumer adoption of next-generation AOL services on the
cable, DSL, and satellite platforms.

-- Continuing the AOL Anywhere unit, with Lisa Hook as President, which will
oversee the Company's AOL Anywhere products and initiatives.

These units will be supported by a newly unified technology and systems development organization and other shared functions, such as business affairs, marketing, communications, selling and business support.

The tighter integration of AOL's multiple brands and an increased focus on key programming categories will enhance growth by driving new efficiencies, enriching the member experience in key content areas and creating additional value for advertising and commerce partners. AOL Web Properties, for example, will provide a consistent user experience with unified features and coordinated programming, while creating more efficient hosting, ad serving, sales, and other online operations for all of AOL Time Warner. At the same time, AOL's Vertical Markets Group will make it easier for commerce partners to reach targeted audiences across all brands.

The Company said the restructuring would allow it to reduce its work force by approximately 1,200 positions. In addition, the Company said that it will eliminate approximately 500 positions at the Sun-Netscape Alliance. As a result, AOL Time Warner expects to take a charge of $100 - $125 million in the 3rd quarter of this year for these announcements and related costs.

Continuing to Lead the Next Phase of the Internet

America Online Chairman and Chief Executive Officer Barry Schuler said: "This new organization enables us to stay at the leading edge of the Internet's development and take full advantage of emerging growth opportunities in areas like broadband, online music and home networking. With the Internet poised to start its next chapter, we are better positioned than ever to deliver valuable new services to consumers and compelling new opportunities to our commerce partners. In the seven months since the merger, we have continued to identify new ways to leverage shared resources across AOL Time Warner and now we are putting them to work. Our new organization will be even more nimble and flexible, while maximizing the benefits of our size and scale."

The reorganization launched today builds on the strong performance America Online has achieved this year. The Company reported record subscriber growth for the June quarter, adding 1.3 million new members for the AOL service to bring its membership to over 30 million. America Online's EBITDA rose 37% to $801 million for the quarter, and its EBITDA margin rose to 37.5% from 30.9% a year ago.

Further, America Online has extended its leadership this year in key online categories. According to the most recent report from Media Metrix, AOL Time Warner's online brands have the largest combined audience on the Internet. In total, the sites were visited by more than 77 million unique users in July, a 20% increase from the previous year, to reach a record 82% of the combined home/work online audience.

In addition, AOL's content channels have the greatest reach of any sites on the Web, with the Entertainment, Music, Personal Finance, and Travel channels all #1 in their categories and experiencing strong growth. For example, in July, the AOL Personal Finance Channel led its category with a 15.6% reach, with more than 14.7 million unique visitors, a 30% increase from its 11.3 million visitors in July 2000.

Another growth driver has been the impressive performance of Time Warner Interactive Properties' sites, which have been closely integrated with Netscape since the close of the AOL Time Warner merger. According to the July rankings, Time Warner Online's sites increased their unique visitors by 46% over the previous year, growing from 16.4 million to 24 million unique visitors.

About America Online, Inc.

America Online, Inc. is a wholly owned subsidiary of AOL Time Warner Inc. Based in Dulles, Virginia, America Online is the world's leader in interactive services, Web brands, Internet technologies and e-commerce services.

Caution Concerning Forward-Looking Statements. This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors and factors affecting the integration of the businesses of America Online, Inc. and Time Warner Inc. More detailed information about those factors is set forth in filings by AOL Time Warner with the Securities and Exchange Commission, including AOL Time Warner's annual report on Form 10-K for the year ended December 31, 2000 and its most recent quarterly report on Form 10-Q. AOL Time Warner is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.