Daily News from New York, New York • 39

1 vaL-Knr AC39TT inert says it's ccoporatir. with FIJI cn cifciznal prcbs ELECTRIC LASS $1.07 $32 $1.15 $45.75 40 Anger over AOL Time Warner's skid By PHYUJS FURMAN DAHY NEWS BUSINESS WRITER Anger flowed at New York's historic Apollo Theater of stumbling media giant ment at the companjrs annual meeting. $1.58 $58.35 $1.74 $33.50 DO AOL Time Warner aired their Fellow shareholder Hariton lashed out at the beleaguered AOL Internet service, telling Case he should ban annoying "pop-up ads." "It's disgusting," he said. "Steve you need to get back into the trenches." Parsons calmly responded to the bitter comments: "What we're committed to doing is creating value for shareholders." His fix-up plans include sending Bob Pittman the veteran AOL exec who rose to chief operating officer of the parent company back to the front line of the ailing Internet unit. While the crowd was tough, after the meeting Parsons told reporters, "the tone of the meeting was more gracious than I expected.

Many of them lost a fair amount of money." Page 4 -v 7 7 vjf I Dick Parsons, Dick Parsons, who officially took- over the reigns of the world's largest media company from outgoing CEO Gerald Levin, said he shared the stockholders' misery over their flagging shares and outlined plans to fix the company. "AOL Time Warner has been a nightmare," said shareholder Michael Hariton of Manhattan. "You just wrote down $54 billion," he continued, referring to the company's recent massive accounting loss, the biggest in U.S. corporate history. "Where did that come from? Our hides!" The scene could not have been more different from last year's annual meeting.

At the time, Levin and AOL Time Warner chairman Steve Case promised the merger of premier online company AOL and Time Warner home of CNN, Warner Music Group, and HBO would yield an unparalleled me-dia-Intemet titan. Since then, ads have dried up at the company's crucial AOL Internet division, and AOL Time Warner has pulled back its sky-high profit targets, slamming the company's Wall Street credibility. The stock has dropped more than 40 this year, closing yesterday at $18.90. That prompted another shareholder to call the merger "$50 billion of pure hot air." And stockholder Bob Schue chided the company for soaking up much-needed dollars to build a new Manhattan headquarters which he called "a Taj Mahal at Columbus Circle." $61.64 yesterday as shareholders bitterness to top manage Asked whether he might scoop up any cable systems from troubled cable giant Adel-phia, Parsons said it "has good cable properties," but declined further comment. Parsons also paid an emotional farewell to Levin, whom he called his "mentor." Levin started out at Time Inc.

three decades ago. He played a key role in building AOL Time Warner through a series of mergers with Warner Turner Broadcasting, and AOL. Investors have said Levin is taking the fall for the company woes. "I know the frustration you feel now is real. Have faith in this company," Levin told shareholders.

"It has been a great ride. I will now close my business career and fade away." AOLTime Warner YESTERDAY $18.90 5 cents rest the largest, like California, getting the most Separately, discount brokerage Charles Schwab said it would now rate more than 3,000 stocks from A to something it hasn't done before, but the advice would be free of any investment banking conflicts, allegations of which have mired its rival stock brokerages. One of the founders of do-it-yourself investing, Schwab said its brokers aren't pressured to push clients to be more active because they are paid with salaries, not commissions. $1.01 $16.96 53 stock price $55 28 VI 19 10 fc- 10 iC-'iD 1 BUDO WILLIAMS DAILY NEWS who officially took control of A seeds By JUDITH SCHOOLMAN DAILY NEWS BUSINESS WRITER State Attorney General Eliot Spitzer hopes for a settlement with Merrill Lynch by next week, after a court deadline was extended to next Thursday. "We have had productive conversations," Spitzer said at a conference early yesterday.

"Hopefully in the next week we will have some sort of closure." Wall Street's biggest brokerage hopes to avoid criminal charges relating to allegations its research was skewed to please investment banking cli AOL Time Warner from departing Gerald Levin, met angry shareholders head-on at yesterday's meeting at Apollo Theater. einriiDD dlaaD toy caenti uesCx 3 states. On April 23 Spitzer and the North American Securities Administrators Association, which represents state securities regulators, said they were working together on the case. "My concern is if there is any settlement, would it be acceptable to all 50 states," Spitzer said yesterday. Under a tentative arrangement, any fine Merrill agrees to pay to settle the case would be divided among those states that agree to the settlement New York would receive 50, with the other states receiving the ents.

Spitzer in his 10-month investigation uncovered E-mails from analysts such as former tech star Henry Blodget that privately blasted stocks that were publicly boosted. The parties were set to appear before State Supreme Court Justice Martin Schoenfeld. The hearing already was postponed once last week. "The fact I was willing to adjourn the court date suggests there has been forward movement," Spitzer added. Any settlement with Spitzer could also be approved by other ex A Sr lot Spitzer says talks with Merrill have been productive..