Sept. 10 (Bloomberg) -- Time Warner Inc., the world's largest media company, said slower growth at its AOL network that buys and sells online advertisements is threatening its chances of meeting sales goals for the rest of the year.

``It had been growing like a weed,'' Chief Financial Officer John Martin said today at a Merrill Lynch & Co. investor conference in Marina del Rey, California. ``We have seen some cancellations. It gives us pause in terms of our confidence to ramp advertising in the back half of the year.''

Last month, the company's AOL online unit projected that ad revenue would rise for the rest of the year. AOL gets ad revenue from the network, display campaigns on Web sites and a partnership with Google Inc. Difficulties in integrating acquisitions, which have amounted to almost $2 billion in the past two years, have hurt results, Chief Executive Officer Jeffrey Bewkes said in August.

AOL has also dropped subscriber fees to attract more Web site visitors. The unit posted a 2 percent increase in ad sales in the second quarter while losing 604,000 Internet-access subscribers, dragging down profit 36 percent to $230 million.

Time Warner, based in New York, fell 33 cents, or 2.2 percent, to $14.85 at 4 p.m. in New York Stock Exchange composite trading. The shares have declined 10 percent this year.

While Time Warner's cable networks business, which includes TBS, HBO and CNN, hasn't been hurt by the economy, publishing sales have slowed, Martin said. Time Warner's Time Inc. magazine unit owns Fortune, Money and People.

`Fundamentally Undervalued'

Bewkes is getting rid of Time Warner Cable Inc., the second- biggest U.S. cable-TV provider, to focus on the TV networks and film business. The 56-year-old CEO merged the Warner Bros. and New Line movie studios and said in May he is open to selling AOL.

Time Warner will receive a $9.25 billion cash dividend from the spinoff of Time Warner Cable, which should be completed by year-end. The company will probably spend the proceeds on its current businesses and acquisitions and also may consider at dividends and share buybacks, Martin said today.

``We think our shares are fundamentally undervalued,'' he said.

Michael Nathanson, an analyst at Sanford C. Bernstein & Co. in New York, said in June that spending the cash on buybacks may not be favorable especially since repurchases totaling $22.1 billion from August 2005 to the end of 2007 barely lifted the shares above $15.

To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.

Last Updated: September 10, 2008 16:03 EDT