Time Warner Inc. has moved to quell speculation over the future of America Online.

"AOL is not only righting itself but is also becoming a serious engine for growth," chairman Richard Parsons told shareholders.

His statement temporarily ended recent speculation that the media giant was considering the sale of AOL which, contrary to initial expectations, has underperformed.

Speaking to reporters Parsons also tried to talk up AOL's value. He said that although the online unit was slowly losing subscribers, advertising was growing and could equal that of rival YahooInc.

"Our challenge is to articulate to Wall Street that there is a Yahoo inside of AOL...so that some of that internet fairy dust gets sprinkled on AOL," he said.

Parsons defended the decision to revert to Time Warner from AOL Time Warner in a rebranding move which immediately triggered speculation about a sell-off.

"We wanted people to stop looking backwards and start looking forward," he said.

Parsons wouldn't be drawn on speculation that the group was considering a bid for Adelphia Communications, the cable company which filed for Chapter 11 bankruptcy protection.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff