Early morning news reports told readers that Time Warner has begun the process of spinning off its AOL division into a separate entity. The earliest versions of those reports did not this time cite unnamed or anonymous sources, or wireless microphones attached to rats traversing the air ducts of the headquarters building, but instead this morning's regulatory filing with the US Securities and Exchange Commission.

As it turns out, that's not exactly what the filing says at all. A Time Warner analysts' briefing this morning will likely lay out the details, but here is what we know based on the source that was actually cited: Time Warner's board of directors has not reached a decision with regard to whether it wants to spin off the AOL unit to TW's shareholders or to anyone else, although the "Company" (read: executives) believe that such a move is probable. However, everyone acknowledges that there may be other possibilities in the works. Here is the complete passage in question:

During 2008, the Company announced that it had begun separating the AOL Access Services and Global Web Services businesses, as a means of enhancing the operational focus and strategic options available for each of these businesses. The Company continues to review its strategic alternatives with respect to AOL. Although the Company's Board of Directors has not made any decision, the Company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner's stockholders, in one or a series of transactions. Based on the results of the Company's review, future market conditions or the availability of more favorable strategic opportunities that may arise before a transaction is completed, the Company may decide to pursue an alternative other than a spin-off with respect to either or both of AOL's businesses.

The final sentence in that passage implies that a formal review of the possibility of a spinoff has not even happened yet, and that's the first step that executives would actually need to take before going forward with a plan. While executives are probably in favor of that direction -- and with good reason -- there's still viable reason for hesitation, most notably the question of whether a detached AOL, even without its less profitable dialup services, would garner a high enough market value for trading in this dismal economic atmosphere.

Putting a damper on this plan (and perhaps having done so since the beginning of this year, as we've learned only now) is that back in January, Google exercised its right to ask Time Warner to sell its 5% equity stake in AOL in an initial public offering. This according to the SEC filing and not a blogged interpretation of the SEC filing. That's a sign that Google wants to cash out. According to the filing, Time Warner had the right to pre-empt an IPO of that 5% stake by issuing its own bid for the stock instead, which it has decided to do. That's probably smart if the company wants to eliminate any chance of market perception dragging that stock value lower, even though it means an expenditure on TW's part.