NEW YORK (CNN/Money) - AOL Time Warner Chief Operating Officer Robert Pittman quit Thursday as part of a management shakeup at the world's largest media company.

The announcement came after weeks of speculation that Pittman had been sparring with senior management and two months after CEO Richard Parsons formally took the helm from Gerald Levin, whose tenure coincided with a steep drop in the company's stock.

Pittman, who came from the AOL side of the company, had been widely associated with lofty promises for growth that were made to investors shortly after the merger of AOL and Time Warner was announced in 2000. His departure will become final after a new CEO is found for the America Online Internet service, the New York-based parent company said in a statement.

The management changes give more power to two Time Warner executives, Don Logan, head of Time Inc., who will become chairman of the company's media and communications group, including AOL, Time magazine, Time Warner Cable and other properties, and Jeff Bewkes, chairman of HBO, who will head up that network as well as New Line Cinema, the WB and Turner Networks in the entertainment and networks group..

Both Logan and Bewkes will report to AOL Time Warner CEO Richard Parsons.

Bob Pittman is out in a major shakeup at AOL Time Warner. Greg Clarkin reports. Play video

"I've decided that after a new CEO is in place at AOL, I won't return to AOL Time Warner as chief operating officer," Pittman said in a statement. "Having worked so hard to build the AOL service and brand, and after then going through the merger and the last 18 months, it's time to take a break."

AOL shares have tumbled from a 52-week high of $47.25 to $12.45 Thursday, off another 5 percent.

America Online, once one of the crown jewels of the AOL Time Warner empire, got hit by a steep drop in online advertising and subscriber growth. Pittman headed the division prior to AOL's acquisition of Time Warner, which was completed in January 2001. He had also been considered a contender for AOL Time Warner CEO.

Earlier this month, an AOL spokeswoman admitted that the company was searching for a new CEO for American Online and had hired executive search firm Spencer Stuart.

The announcement came the same day the media company came under scrutiny for its accounting practices. The Washington Post, citing hundreds of documents and interviews with former and current executives, reported that AOL engaged in various swaps and trades with partners, taking in $270 million in revenue from the practices in 2000 and 2001.

CEO Parsons dismissed the speculation in a statement to employees Thursday. "There are no 'accounting issues' at our company," he said. "Yet we can't be satisfied with observing the law or merely doing what's required. Given who we are and what we do, we must embody a higher standard."

While some investors said the management shakeup was a good first step, it remained far from clear that the moves announced Thursday would be enough to inject life into back into AOL Time Warner's moribund stock. (Click here for more).

AOL Time Warner (AOL: Research, Estimates) is the parent of CNN/Money.