TW Building

MediaWeek reports that Time Warner has finally wound up its settlement with the government on behalf of its AOL division by paying $300 million to the Securities and Exchange Commission and $60 million to the Justice Department. The company - with perhaps some optimistic whimsy - set aside $150 million as a reserve fund for civil litigation in what will inevitably involve a flurry of shareholder lawsuits. The company also said it would restate its accounts for 2001 and 2002 to reflect the fact that $430 million in advertising revenue didn't really exist. The penalties turned out to be only about half of what The Washington Post had previously reported AOL might have to pay.

Additional AOL accounting coverage here.

As the Interactive Advertising Bureau (IAB) uses public financial statements as the main basis for its industry spending estimates - in fact it takes those figures and extrapolates across the many sites where those revenues are not broken out - the most prominent industry estimates of online advertising are known to be significantly inaccurate for those periods. AOL already restated about $190 million in booked ad revenues, and this new development increases the total to more than half a billion dollars.