NEW YORK (CNN/Money) - After issuing a directive requiring divisions of Time Warner to use AOL's e-mail service exclusively , executives at AOL Time Warner Inc. backpedaled because the service could not handle various business applications, according to a published report Friday

The divisions did not use the same service as AOL subscribers with home accounts, yet employees claimed the customized AOL products frequently crashed, could not send large attachments, dropped online connections, and labeled large mailing lists as "spam", according to the Wall Street Journal.

In one instance, sales executives at Time Inc.'s Entertainment Weekly publication tried to e-mail an advertising presentation to a major agency, but the service could not handle the large attachment. The executives ended up sending a staffer to the agency in a cab with a printed copy, according to the report.

"The systems didn't work well for heavy data and graphics users," AOL Time Warner's senior vice president and spokesman, Edward Adler, told the Journal. Divisions now will be allowed to pick "the systems that better suit their individual business needs."

The initial directive was part cost control and part corporate pride. By using its own software the company could save on licensing fees, but it also symbolized the largest merger in U.S. history between "old" and "new economy" companies, according to the Journal.

"It's true that it was a policy decision by AOL Time Warner leadership that we should set a good example by using our own products," a top information technology executive at the company told the paper.

AOL Time Warner (AOL: down $0.35 to $24.30, Research, Estimates) is the parent company of CNN/Money.