As bad as things have gotten for

AOL Time Warner

(AOL)

, they seem to be getting worse.

The company said Monday that advertising and commerce revenue at its America Online unit will fall short of

guidance the company gave in April. The companywide guidance, in turn, was down from financial forecasts AOL Time Warner

offered analysts in January.

The serial guidance-lowering makes 2002 a remake of 2001, as far as AOL Time Warner's relationship with Wall Street is concerned. Last fall, the company similarly rescinded financial projections made earlier in the year.

With America Online's continued pattern of shortfalls, the January 2001 merger of the online service with Time Warner has yet to make its promised payoff. Meanwhile, high-level executives who once championed the power of the merger -- including former CEO Gerald Levin and former co-chief operating officer Bob Pittman -- have departed under clouds of disappointment.

On Monday, AOL Time Warner's shares fell 39 cents to trade at $12.74. The stock is down more than 70% from its price at the time of the merger's close.

Slowdown

As the company warned in July, it expects full-year growth in earnings before interest, taxes, depreciation and amortization -- a common bottom-line yardstick for media companies -- to come in at the low end of April's revised range of 5% to 9% growth over 2001.

But this time around, the company says that the online unit's full-year advertising and commerce revenue is "tracking" at $1.7 billion -- below the $1.8 billion to $2.2 billion range that Dick Parsons, Levin's successor, gave in April. The company says that there's "an additional 5% downside risk" to that new $1.7 billion number, meaning don't be surprised if the number comes in at $1.6 billion.

America Online's EBITDA -- also expected earlier to be somewhere between $1.8 and $2.2 billion for the year -- will come in between $1.7 billion and $1.8 billion, AOL Time Warner now says, down from the corresponding $2.3 billion reported in 2001.

The online unit's slide reflects most prominently the decline in the Internet advertising market that has hurt companies such as

Yahoo!

(YHOO)

and put numerous other players out of business.

Contrast

But the bad news may arise from some AOL-specific problems as well. The online business, for example, has to contend with scrutiny of its accounting practices in times past stemming from the

Washington Post's

coverage of certain advertising and commerce deals.

In contrast to Yahoo!, which says it has essentially run through all the advertising money that it reaped during the free-spending days of the dot-com boom, it appears that AOL has yet to wean itself from multiyear deals reached in earlier times.

In July, the company said that more than half of the advertising and commerce revenue it reported for the second quarter ended June 30 comprised vestigial boom-era deals. The company says it expects to recognize about $860 million in similar revenue over the next four quarters.