EDITORIAL: The industry could suffer for AOL case.(Brief Article)

No-one should be surprised at the news that the wave of accounting investigations has crashed on media owner shores and that AOL Time Warner is being scrutinised for its own accounting practices. What seems to be becoming a US virus is perhaps easily caught by media companies struggling against the advertising downturn to make a brave show for investors. And, of all of them, AOL Time Warner is the media owner under the most pressure.

Earlier this year it announced the biggest loss ever recorded in US corporate history, with a quarterly net loss of pounds 37.4 billion.

Perhaps it's also not surprising that AOL Time Warner's interesting accounting practices relate to its online business, where revenue has been even tougher to generate than in its traditional and established businesses. In its latest quarterly revenue statement, issued last week, quarterly revenue was up by 10 per cent to dollars 10.58 billion, but commercial revenues in the online division were down 42 per cent.

Now articles in The Washington Post have alleged that AOL employed some unusual methods when it came to booking dollars 270 million of online advertising deals both before and after the Time Warner merger. The Washington Post claims ...