AOL Time Warner today warned results at its America Online internet division would fall below expectations as a result of the ongoing advertising slump.

American Online, the world's biggest internet service provider and once trumpeted as AOL Time Warner's star performer, has been hampered by falling advertising revenue and a failure to make an impact among broadband customers.

America Online had promised to "super charge" Time Warner's growth when the merger was announced.

However, the internet business has instead become a drain on the rest of the group.

The media giant, which owns magazine publisher IPC in the UK, today said the stronger than expected performance of its other divisions meant full year revenues for the company as a whole would meet targets.

In the second quarter the America Online division gained just 492,000 subscribers, less than half analysts' expectations.

Last month, AOL Time Warner appointed Jonathan Miller, a former USA Interactive boss, to turn the troubled division around after its previous chief, Bob Pittman, quit after just months in the job.

AOL said it expected America Online's full year revenues to be about £1.1bn, down from £1.7bn in 2001.

It warned revenue growth for the company as a whole would be at the low end of the 5-8% range.

In July, AOL said revenue growth would be at the high end of this range.

AOL's share price, which has fallen heavily in recent months amid investigations into the group's accounting, fell 3.3% to $12.7 (814p) on the news.

A year ago AOL's shares traded at $44.50 (286p).