Time Warner confirms AOL spinoff plans

As reported earlier, Time Warner has been looking to spinoff AOL, and now according to the Wall Street Journal, those plans have been confirmed.

Time Warner will spin off AOL into a publicly traded company and focus on its film, television and other content-creation businesses. The move is expected to be completed by the end of this year. The spinoff will include AOL's dial-up subscription business and its ad business.

AOL also has to buy back Google's 5% stake. Back in 2005, Google purchased its 5% stake in AOL when it took over the search functions on AOL's media properties. AOL is currently in negotiations with Google to buy back its stake. A deal is expected to be completed by the third quarter of this year.

Recently, Time Warner has turned AOL into an ad-focused business, but the company's ad revenue growth consistently disappointed analysts on Wall Street. AOL's latest acquisition, Bebo, an online social networking service, which it paid $850 million to acquire, has yet to mane any profits to the company.

One can't blame Time Warner for wanting to spinoff AOL. Their merger has been called one of the "Worst Mergers In American Corporate History", and has cost the company more than $100 billion in shareholder value.

The future of AOL after the spinoff is uncertain. There has been proposed AOL mergers in the past. There has been talks of both Yahoo and Microsoft acquiring AOL, along with Earthlink acquiring AOL's dial-up business, all which have fallen flat.

Report a problem with article
Previous Story

Microsoft officially launches new search at Bing.com

Next Story

Pension details of 109,000 members on stolen laptop

10 Comments

I still think the merger should of never happened. It was just way too big of a merger at the time, and and now it lead to this.

Copoboxx said,
I wish microsoft purchases AOL.. Jesus i'm with AOL!!

+1 Im with you on that bro.. damn! SOMEBODY! ANYBODY! save my email!

The fact that TW bought a trash company (AOL) with no future is an indication of how out of touch TW has been. Now TW is trying to cap bandwidth and charge customers even more $$$.

TW will continue down its death spiral for years to come. My guess is that they'll hit bottom and get snatched up for pennies on the dollar by a better company. Well, one can always hope.

Commenting is disabled on this article.