Mr Parsons is seen as a safe pair of hands

"We have made some mistakes in the past year," said chairman Steve Case, noting that excessive profit targets had been set and that the company had stuck to them for too long.

"Things didn't go quite as we expected," he said, referring to a slump in the company's share price and a $54bn (�37bn) write-off to reflect a loss in the group's value since it was created in January 2000.

The group's shares have fallen 40% since the beginning of 2002 and 70% since the merger of America Online and Time Warner in January 2000.

New chief executive

Speaking at the company's annual general meeting, Mr Case vowed to get the company's "house in order" and to "deliver on the premise and promise of the merger".

The meeting also marked the replacement of chief executive Gerald Levin who was succeeded by Richard Parsons.

Mr Parsons, one of America's most prominent black businessmen, takes over a sprawling media giant, with interests ranging from cable channels like CNN to Time magazine and film studios making box office hits like Lord of the Rings.

Analysts are enthusiastic, touting him as a "safe pair of hands" and the man to set more realistic goals than his predecessor.