AOL Data Compromised

Time Warner's (TWX Quote) AOL Internet unit is investigating how data from more than 650,000 searchers ended up being improperly disclosed on its Web sites.

AOL employees released the data, covering searches from March through May, on an internal Web site set up to communicate with academic researchers. Bloggers, who discovered the breach Sunday, are crying foul -- blasting AOL for failing to safeguard its users' privacy.

"Although there was no personally identifiable data linked to these accounts, we're absolutely not defending this," AOL spokesman Andrew Weinstein says in a statement. "It was a mistake and we apologize."

The screwup may make people leery of doing searches on AOL, says Michael Arrington, of the blog TechCrunch, which earlier disclosed the error.

"The most serious problem is the fact that many people often search on their own name, or those of their friends and family, to see what information is available about them on the Net. Combine these ego searches with porn queries and you have a serious embarrassment," he writes. "Combine them with 'buy ecstasy' and you have evidence of a crime. Combine it with an address, Social Security number, etc., and you have an identity theft waiting to happen. The possibilities are endless."

The revelations are an embarrassing setback for New York-based Time Warner, which is planning a huge overhaul of AOL to attract more users and advertising dollars. The changes will result in the elimination of more than 5,000 jobs.

Time Warner expects to save $1 billion through next year as it quits marketing AOL's fading dial-up access business to seek more advertising revenue. The company has said the overhaul won't have a material impact on its bottom line.

Shares of Time Warner, also the No. 1 media company, fell 16 cents to $16.40.