A billion here, a billion there; pretty soon you're talking real money

What’s the difference between Egypt and media giant AOL Time Warner? If you compare AOL’s loss in 2002 and Egypt’s gross domestic product, the answer is ‘not very much’.

Stringing up the biggest loss in corporate history, AOL has reported a full year net loss of $98.7 billion, equivalent to $3,130 every second of every day in 2002. That gargantuan figure was reached after AOL said it was writing down $45.5 billion from the book value of the America Online Internet business.

The writedown was at least twice what most analysts were expecting and capped a dreadful year which saw the departure of several senior executives.

It also saw the ousting from the chairman’s post of Steve Case, the man who built AOL and engineered the $106 billion purchase of Time Warner at the height of the dotcom boom. Yesterday’s announcement also saw the departure of Ted Turner, the company's vice-chairman and chief mover and shaker in the battle to get ride of Case.

The pricking of the dotcom bubble aside, the merger of AOL’s massive Internet reach with Time Warner’s music, film, book, cable television and magazine properties has been an almost mitigated disaster.

The much vaunted synergies between the two sides have failed to happen, while AOL’s subscriber growth has slowed dramatically as consumers have found faster, cheaper and more enjoyable ways to access the Internet. Advertising across very part of the company has also been severely hit.

If the past is a disaster, the short-term future for the company is not exactly a bed of roses. CEO Dick Parsons said 2003 would be challenging as programming costs rise and advertising remains subdued. There’s a small matter of a $25.8 billion debt pile to sort out as well.

The shares slumped from $13.96 to $12.61 after the news was announced in after-hours trading, meaning the company is now valued at $56.4 billion.