(Page 2 of 2)

Several other analysts and investors said Mr. Parsons's political experience was suited to the company's current predicaments, which center on making peace with irate shareholders, building morale among disgruntled executives, and fending off federal securities regulators. Both the Securities and Exchange Commission and the Justice Department have begun investigations into the accounting at the AOL division in the period surrounding the merger.

Advertisement

In his previous stint as a chief executive of a very different company, Mr. Parsons, a well-connected moderate Republican, helped the Dime Bank weather investigations by federal banking regulators during the savings and loan crisis. Some shareholders hope his connections and finesse will now help AOL Time Warner.

Most analysts expected Mr. Parsons to emerge as chairman at this week's meeting, although some indulged in some fantasizing about AOL Time Warner's drafting a seasoned media executive like Viacom's president, Mel Karmazin, to knock the company into shape. On Wednesday, a spokesman for AOL called such speculation absurd. But it highlighted the continuing anxieties over the company's leadership.

People close to the board said yesterday that the decision to name Mr. Parsons was not contested, a mark of his skill at managing its sometimes discordant factions. Some major shareholders have said they are watching for any signs of dissent or factionalism on the part of the directors from the AOL side of the merger, who include Mr. Case as well as his two longtime deputies, Kenneth Novack and Miles Gilburne. But one person close to the board said yesterday that they did not contest Mr. Parsons's election.

Mr. Parsons's appointment would have been unthinkable just two years ago. Then Mr. Case was heralded as the visionary who foresaw the rise of the Internet as a mass medium, and Mr. Levin, the chief executive, and Mr. Pittman, the co-chief operating officer and Mr. Levin's apparent successor, monopolized the big decisions.

Last week, many shareholders, company executives and analysts said they admired Mr. Parsons for his handling of a treacherous year. He praised Mr. Pittman even as Mr. Pittman he resigned under heavy criticism from the Time Warner side of the merger. He won the support of the company's executives and shareholders by appointing two popular division chiefs from the Time Warner side of the company — Don Logan and Jeffrey Bewkes — to help him run the company. And he reacted with cool confidence when he relayed to investors that federal regulators were investigating AOL's accounting.

Some disgruntled shareholders grew impatient as Mr. Parsons stood by Mr. Case during months of mounting opposition. But yesterday Mr. Parsons's steadfast support for Mr. Case appeared to serve him well, delivering the chairmanship along with the support of Mr. Case and his allies.

Still, the months ahead may require him to flex a different set of muscles. "You need a strong C.E.O. who can knock heads," John Tinker, an analyst at Blaylock & Partners, said this week. "This company has got to start hitting on all gears. They should either fire Dick Parsons or they better get behind him."