05.29.2009 03:20 PM
Time Warner Plans to Spin AOL

NEW YORK: Time Warner is looking into spinning off AOL. Company chief Jeff Bewkes said today that a spin-out appears to be the best option for divesting the Internet unit, according to Reuters. A spin would divide Time Warner’s AOL stock among its own shareholders on a pro rata basis.

The plan to shed AOL comes just a month or so after the cable business was similarly spun out so Time Warner (NYSE: TWX) could focus on content. The company owns the Turner channels--CNN, TNT, TBS, Cartoon Network, etc.--as well as HBO, where Bewkes cut his teeth. It also has Warner Bros. studios and Time, Inc. publishing.

Spinning off AOL would end a relationship structured nine years ago by former Time Warner Chairman Jerry Levin, a veteran button-down TV executive who famously donned a polo shirt to announce the merger with AOL founder Steve Case. AOL was the quintessential Internet powerhouse at the time, dominating email use and dial-up Web access. As if by an occult hand, free browser-based service and ISP competition started to flourish. Levin’s vision of a massive, synergistic content-distribution system spruce goosed. Around $200 billion in shareholder value disappeared within a few years of the merger.

TWX shares got a small boost from the news, rising briefly yesterday from $22.80 to $23.74, before settling down today at around $23.25. In late 1999, just before TWX merged with AOL, shares briefly peaked at more than $270.-- Deborah D. McAdams 

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Posted by: Deborah McAdams
Sat, 05-30-2009 01:40 PM Report Comment
You used "the occult hand" in an unbylined piece? Really. The Order does not approve.

Thursday 10:05 AM
NAB Requests Expedited Review of Spectrum Auction Lawsuit
“Broadcasters assigned to new channels following the auction could be forced to accept reductions in their coverage area and population served, with no practical remedy.” ~NAB

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