Time Warner chairman Richard D. Parsons said this week that improving America Online was a company priority in the effort to increase Time Warner share price, saying "the real driver of enhanced value, I think, is going to be AOL in the short term and the long term," writes the New York Times. It adds that the comments point to the view among traditional media companies that the internet provides opportunities to increase advertising revenue and gain audience as other media mature or experience slow growth.

In the second quarter, ended June 30, AOL accounted for $2.1 billion of Time Warner's $10.74 billion in revenue, and $550 million of $2.47 billion of earnings before interest, tax, depreciation and amortization.

AOL's recently unveiled strategy of offering a free web portal aims to attract audiences and advertisers to compete with Google and Yahoo, and AOL has been in discussions with both as well as with Microsoft about potential partnerships in support of that strategy.

Parsons said one thing that AOL is missing is its own search technology; it now uses Google on its portal. He also said AOL lacked the overseas presence of Google and Yahoo.

Recent coverage:

- Google Could Bid on AOL to Thwart MSN Deal
- AOL May Chuck Google Search, Use Microsoft's
- NY Post: AOL-MSN Merger Talks Underway
- AOL, Feedster Team for 'My AOL' Personalized Homepage
- Agencies Named for AOL Portal Launch Campaign
- AOL Launches Free Portal Beta
- AOL Portal Marketing Strategy Depends on Helpful Rivals Google, Yahoo