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Time Warner Considered AOL Spinoff

By Ed Oswald, BetaNews

May 20, 2005, 3:17 PM

Time Warner said that it had recently considered spinning off its America Online unit, but decided that it would be unnecessary to do so at this time, according to a report in the Wall Street Journal on Friday.

The online division would have been spun off to create some cash revenue to allow for other acquisitions, the company said.

"Right now AOL is currently integrated into our operations," Time Warner CEO Dick Parsons said. "But if it gets to the point where consolidation is happening in the Internet space and, in order to play most efficiently, we need ... our own currency, the possibility [of an initial public offering] is out there."

Parsons admitted that the AOL merger did not work out as Time Warner had hoped, but reiterated that the online service is an important part of the company.

In recent months, revenues have been declining at AOL as the company has struggled with subscriber loss. These problems have become a drag on Time Warner stock overall, prompting calls by shareholders to either look for ways to turn the division around or spin it off altogether.

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By tannman1

edited May 22, 2005 - 12:41 PM

AOL and it's unfavorable practices in both billing and support should be taken under their corp microscope perhaps. The reputation in these areas has damaged the company perhaps beyond repair not to mention it's out dated and quite frankly theirs not alot to woo new users with so many other choices available. Their dial up price is too high and the network offers little. I am quite surprised AOL lasted this long

Score: 0

By hbkh

posted May 23, 2005 - 2:07 PM

I agree, with users becoming more and more internet savvy and computers getting easier to use, the appeal of the the all-in-one AOL approach has hit its downfall. Also, when you look at DSL and cable internet prices that are down in the mid-20 dollar range, along side AOL at $23.95, who would choose DSL or cable?

Score: 0

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