AOL Time Warner has sidelined the chairman/ceo of its America Online division as the performance of the internet unit continues to hold back its parent’s stock price.

AOL boss Barry Schuler has been transferred to a new post as chairman/ceo of the newly formed digital services development group with immediate effect. His current duties will be assumed by Robert W Pittman, co-chief operating officer at the parent group.

Although he is moving to a unit currently with no staff, Schuler insists it is not a demotion. Flaunting his considerable personal wealth, he commented: “When you don’t need to work, you don’t get demoted.”

His new post includes heading a project to develop products for home networks in which computers, televisions and other entertainment devices are connected. Schuler is regarded as a technologist rather than a manager, and has reportedly been the source of discontent among AOL staff.

The reshuffle comes as growth in AOL’s subscriber base slows and ad revenues are down. Company insiders suggested the timing of the move may have been brought forward to allay Wall Street fears that the unit is bringing down the value of AOL TW.

Data sourced from: The Washington Post Online; additional content by WARC staff