Shares in AOL Time Warner, the world's largest media company, closed 14% on the day after the firm posted the largest annual loss in US history.

The loss for last year was roughly the same size as the gross domestic product of Israel.

The company also announced the departure of its vice chairman Ted Turner, the maverick cable TV mogul.

AOL reported a loss of nearly $100bn for 2002, after a loss of $44.9bn for the final three months of the year.

The largest charge related to the group's embattled America Online internet business.

However, its film and entertainment division helped strengthen the company's performance, thanks to hits such as "Lord of the Rings".

Reaching potential

AOL Time Warner's overall loss for 2002 was $98.7bn (£60bn), the result of a turbulent year.

Its share price closed down $1.96, or 14%, at $12.

The company's shares have slumped 70% since the merger between internet service provider America Online and the media giant Time Warner two years ago.

The merger was the biggest in the world, and was designed to pipe Hollywood-style entertainment through the internet.

Mr Turner, founder of CNN, sold his media group to Time Warner and became vice chairman of AOL Time Warner at the time of the merger, which he famously described as "better than sex".

The media group said he was leaving for personal reasons.

Mr Turner had described his role as vice chairman as "a title without portfolio ... like the Emperor of Japan," saying he had one foot on the sidewalk.

"With this team in place, I am optimistic that the company will be able to move forward and reach its true potential," he said in a statement.

List of losses

Earlier this month, AOL Time Warner's chairman Steve Case quit. He was seen as the driving force of the merger but blamed by some investors as a factor in its demise.

The company's annual loss of $98.7bn, or $10.1 per share, was sharply higher than last year's loss of $4.9bn or $1.1 a share, dragged down by the falling value of its internet business.

Overall sales for the last three-month period rose 8%.

Dick Parsons, elected as chairman following Mr Case's departure, said the company "will strive to run each of our businesses as well as or better than before, with a continued major focus on stabilising and revitalising America Online".