Miller Time at AOL

Looks like Time Warner (TWX) Chief Executive Richard Parsons will be keeping Jon Miller on his America Online buddy list.

Miller, who has run AOL since 2002, has extended his contract as AOL's chief executive. He inked the three-year pact about a month ago, according to a person familiar with the matter. His current contract was set to expire at the end of the year, according to the New York Post, which first reported Miller's extension. An AOL spokeswoman declined to comment.

Time Warner is retaining the 48-year-old Miller as it mulls whether to align AOL with another company. Google (GOOG), the No. 1 Internet search company, and cable giant Comcast (CMCSA) are considering joining forces to invest in America Online, according to media reports. Yahoo! (YHOO) and Microsoft (MSFT) are also weighing an investment in the Time Warner unit.

AOL also is playing a role in Time Warner's dispute with dissident shareholder Carl Icahn. He has pointed to the subscriber drop at AOL as evidence that management hasn't taken done enough to boost shareholder value. Icahn is urging the New York-based company to fully spin off its cable unit and to buy back $20 billion worth of stock. Time Warner management has said its plan to spin off 16% of the cable business and to buy back $5 billion in stock demonstrates that it is committed to delivering shareholder value.

Under Miller's leadership, AOL's reputation has improved with investors. Though the business continues to hemorrhage dial-up subscribers, losing 917,000 in the U.S. in the latest quarter, it is gaining advertising dollars as companies shift their spending online. AOL's second-quarter advertising sales rose 45% to $320 million in the second quarter. The unit also has put many of the features that were once available only to AOL members on its Web site, AOL.com, which started last year. An advertising campaign for AOL.com began earlier this month.

Shares of Time Warner, which also owns CNN and the Warner Bros. film studio, were unchanged at $17.66.