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Time-Warner Planning AOL Split

Posted by Zonk on Wed Feb 06, 2008 01:09 PM
from the seems-like-every-year dept.
Businesses America Online The Internet
Two years ago the word was AOL was planning a split from Time-Warner, because it was so successful. Now Time-Warner is considering a split of its own, deciding whether or not to separate the two 'halves' of the AOL pie. The split would see its 'access' ISP side made into an entity separate from its 'audience' side, consisting of portals, advertising and blogs. "[Time-Warner chief executive Jeffrey Bewkes] also said [AOL's] 84 percent ownership stake in Time Warner Cable is 'less than optimal' for both companies. He said the two companies are talking about operating improvements and changes to the ownership structure. The chief financial officer, John Martin, said it will take 'several more months' to separate the AOL businesses 'because it's fairly complicated.' The company expects AOL's advertising revenue for the first quarter of 2008 to be 'essentially flat to down slightly' versus the year-earlier quarter, he said."
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  • funny (Score:4, Insightful)

    by nomadic (141991) <(moc.liamg) (ta) (dlrowcidamon)> on Wednesday February 06 2008, @01:16PM (#22323318) Homepage
    Back when AOL and Time Warner merged, everyone except techies said they didn't understand, Time Warner was a fading dinosaur while AOL was a superstar. The techies said they didn't understand, AOL was a company heading inevitably towards failure--they just didn't have anything that anyone really needed to pay for.

    • Re: (Score:3, Interesting)

      by steelfood (895457)
      I once heard it being described as an old billionaire nabbing a young hot trophy wife, forgetting that the wife gets half the estate when there's a divorce, and gets progressively less hot as the years go on.

      The only difference is that the billionaire will probably naturally die before the hot wife turns into an old hag, but a corporation will remain alive as long as it can.

    • Re: (Score:2, Interesting)

      by dk90406 (797452)
      I think this is a indicator of what will happen if Microsoft (Time Warner)buys Yahoo (AOL). I see now way Microsoft can gain anything from that deal.
      • I agree, and I think them trying to buy Yahoo is telling that Microsoft isn't doing so well. Microsoft lacks focus, and they want to take shortcuts. They look at Yahoo, figure they can buy up all that content, buy out a search competitor, and everything will be great, but Yahoo itself is struggling to find meaning and purpose. I don't think Microsoft will look back at any such deal with too much enthusiasm.
        • why do you think I want the Yahoo/MSFT deal to go through? MSFT wastes $45 billion dollars and another ~$5 billion trying to straighten out the mess. Even MSFT can't stand being crippled like that. It will take them a decade to recover.

          GO MSFT!!!! Go Yahoo!!!!

      • Re:funny (Score:5, Insightful)

        by BewireNomali (618969) on Wednesday February 06 2008, @02:32PM (#22324318)
        branding and user base.

        google had google video. youtube was crushing google video. google did not have a strong presence in video online and realized that internet inertia had hit - youtube was to video what google was to search. by buying youtube - they bought the branding and presence - a presence that is now lucrative because of the content deals, etc.

        microsoft is not analogous to time warner. yahoo is not analogous to aol. yahoo has a strong web presence - this is undeniable. microsoft does not and cannot build a strong web presence (MSN gets good numbers but those are cheat numbers because of explorer defaults that most don't change) because it moves too slowly and it doesn't understand how to build a web BRAND. Unfortunately for Microsoft - recent evidence shows that younger execs - younger companies - have a better sense of building brands online. microsoft cannot do this - yahoo is not the answer. but this deal is not analogous to the AOL deal. At the time, it seemed sensible that the internet's premier portal get exclusive access to a huge library of content. Of course in retrospect it seems more sensible to strike deals with content companies so as to not cross-corrupt disparate corporate cultures - and i'm certain somewhere there are rules about the critical mass size of companies before they collapse under their own weight.

        building a presence on the web requires core strength. google has search. not sure what yahoo's is, but they have stickiness. microsoft has NO online core strength. NONE. And it's 2008. their search is mediocre in most respects compared to google. they develop also/ran products long after internet phenomenons emerge - despite having the money to chase trends so aggressive so as to appear innovative even if they are not. Their online products do not differentiate on the basis of quality and/or branding. Finally, their inexorable ties to backward compatability - be it to old formats and or dying business models - it's like trying to sprint with a ball and chain. They have a problem.

        they need to spin off a lightning quick young group - get the brightest young maverick engineers and call it microlabs or something. Let them build some crazy shit and see what pops up. this strategy here is for the fucking birds and IMO a waste of 40+ billion.
        • You make some good points.
          I see some similarities between MS and Time Warner: both depends on traditional products and have, as you pointed out, no real online generated revenue (MS: OS, Office, XBOX etc. Time Warner: Media), and also between AOL and Yahoo (online only, no real traditional revenue. Their biggest asset is a large user base.

          Your last point, being that wasting 40+ billion is a bad move, was exactly my point. MS would probably fu.. up AOL, and drive users away.
          And true - the MS/Yahoo - TW/AOL

      • Re: (Score:3, Informative)

        by hansonc (127888)
        How short people's memories are.

        AOL bought Time Warner. The company name became AOL-Time Warner. Eventually the AOL portion was dropped but it doesn't change the fact that AOL bought Time Warner, not the other way around.
      • The problem is that AOL (Yahoo) bought Time Warner (Microsoft), so that your thought that there is equivalence here is incorrect.

    • Re: (Score:3, Insightful)

      by Dionysus (12737)

      AOL was a company heading inevitably towards failure--they just didn't have anything that anyone really needed to pay for.

      Really? Because when I read /. from that period (like here [slashdot.org] and here [slashdot.org]), it's all about doom-and-gloom, and AOL-TimeWarner will take over the internet and stop people from access any content without being an AOL subscriber.

  • Hasty marriages are bound for divorce

  • You've got .... (Score:5, Funny)

    by bizitch (546406) on Wednesday February 06 2008, @01:21PM (#22323388) Homepage
    ...layoffs
  • AOL to Time-Warner: "It must have been something you assimilated..."

    Really with AOL's dial-up business quite rightly going down the tubes (heheh) it does make perfect business sense to at least spin it off to die on it's own or as a bonus have some sucker buy it.

    • it does make perfect business sense to at least spin it off to die on it's own or as a bonus have some sucker buy it.
      What? But, they told me dialup access was making a strong comeback!

    • AOL's been spinning off their dial-up stuff for years. In Europe, they sold everything in 2006, and have been doing the same in the U.S.. They are putting all their eggs in a basket called "ad revenue", which while being a bad bet in the long run, in my book, is better than relying on selling something almost no one buys any more.

      • AOL's been spinning off their dial-up stuff for years. In Europe, they sold everything in 2006, and have been doing the same in the U.S.. They are putting all their eggs in a basket called "ad revenue", which while being a bad bet in the long run, in my book, is better than relying on selling something almost no one buys any more.
        --

        Doesn't Google rely amlost exclusively on ad revenue? Or is the difference that Google is serving the ads and not just being a conduit for the ads?

        • Perhaps, but Google doesn't suck. Also I think the "serving the ads" part is part of it. Plus, Google is smart enough to have ads that people like you and me don't instinctively block. I think the the GoogleSense text ads or whatever they're called are great. Even if they are irrelevant or spammy they aren't these ludicrous epilepsy-inducing intelligence-insulting concentration-breaking banners that most companies use. AOL is strictly lowest common denominator. You can't use their stuff without going

  • I'm worried (Score:5, Funny)

    by 4D6963 (933028) on Wednesday February 06 2008, @01:27PM (#22323440)

    Is it that AOL is doing bad? Because I haven't received any CDs from them in a while, so I'm getting worried..

    • Re:I'm worried (Score:4, Funny)

      by SoupGuru (723634) on Wednesday February 06 2008, @01:41PM (#22323606)
      me too.
      • > On Wednesday 06, 01:41 PM, SoupGuru said
        > me too.

        me too!

        • Time-Warner Planning AOL Split
          Posted by Zonk on Wednesday February 06, @01:09PM
          from the seems-like-every-year dept.
          Businesses America Online The Internet
          Two years ago the word was AOL was planning a split from Time-Warner, because it was so successful. Now Time-Warner is considering a split of its own, deciding whether or not to separate the two 'halves' of the AOL pie [CC]. The split would see its 'access' ISP side made into an entity separate from its 'audience' side, consisting of portals, advertising and blogs. "[Time-Warner chief executive Jeffrey Bewkes] also said [AOL's] 84 percent ownership stake in Time Warner Cable is 'less than optimal' for both companies. He said the two companies are talking about operating improvements and changes to the ownership structure. The chief financial officer, John Martin, said it will take 'several more months' to separate the AOL businesses 'because it's fairly complicated.' The company expects AOL's advertising revenue for the first quarter of 2008 to be 'essentially flat to down slightly' versus the year-earlier quarter, he said."

          I'm woried (Score:5, Funny)
          by 4D6963 (933028) Alter Relationship on Wednesday February 06, @01:27PM (#22323440) Homepage Journal

          Is it that AOL is doing bad? Because I haven't received any CDs from them in a while, so I'm getting worried..
          --
          The ARSE 0.2d2 [sourceforge.net]. Sound -> Image -> New Sound.
          [ Hide Replies | Reply to This ]

          *

          *
          Re:I'm worried (Score:1, Funny)
          by SoupGuru (723634) Alter Relationship on Wednesday February 06, @01:41PM (#22323606)
          me too.
          --
          **What doesn't kill you only prolongs the inevitable
          [ Reply to This | Parent ]

          Me too.
          > On Wednesday 06, 01:41 PM, SoupGuru said
          > me too.

          me too!

          me too!

    • Oh, the good ol' days of AOL dial-up:

      One sunny day, arrived in the mail,
      500 free hours from AOL!
      Twas looking for fun
      But then for my gun
      When the line busy and thus it failed.
    • You can't that much malicious software on one CD anymore...

    • I stopped looking out for them after I insulated my first bunker with only AOL mailings...
  • shrinking pie split in two, so that's even harder to sell, smart,...

  • Missing Tag (Score:3, Funny)

    by R2.0 (532027) on Wednesday February 06 2008, @01:35PM (#22323528)
    Where's the "whattooksolong" tag?

  • Uneblievable (Score:4, Interesting)

    by oahazmatt (868057) on Wednesday February 06 2008, @01:38PM (#22323576) Journal
    All the corporate hullabaloo, layoffs of low-level employees, rebranding and marketing that only lasted, what, a few years, and they plan to just hit Ctrl + Z on the whole thing?
  • ... to hope for a Microsoft Yahoo! post-merger demerger? Only with Yahoo pocketing all the cash?
  • So, they're going to make two departments, one that's profitable and growing, and one that can be cut and eliminated in one year? Makes business sense to me. They call it "cutbacks"

  • AOL does NOT own Time Warner Cable (Score:3, Informative)

    by steelfood (895457) on Wednesday February 06 2008, @01:46PM (#22323690)
    Time Warner does.

    And yes, it's Time Warner, not AOL Time Warner.

    AOL has long been merely a division within Time Warner.
  • Hopefully google will sweep in and buy AOL and get a good price for it. I think that'd be an easy way to pick up a bunch of users who aren't so tech saavy while upping its marketshare in email and IM.

    I hope they kill off the aol portal and AIM and replace them with something decent.

    I know google's getting too big for its britches, but I also want to see them keep beating up MSFT. The enemy of my enemy is my friend, for now at least.

    -G

  • Party time... (Score:4, Funny)

    by owlnation (858981) on Wednesday February 06 2008, @02:21PM (#22324170)
    It's wonderful! 2008 may be a great year! Both Yahoo and AOL may soon be no more.

    Now if we can just find a way to rid ourselves of eBay, Real, Symantec and a few others...
  • ... it's time to mail out some free dial-up CDs to increase market share. No wait, this is 2008: free Blu-Ray discs!
  • I wonder if this has anything to do with why DNS "not found" queries suddenly started directing me to a search/advert server run by RoadRunner.

    That's some evil shit. If I were a phishing enterprise I'd be watching this closely. When your own ISP is pharming you, it's just a matter of time before something evil crawls out from under a rock and takes notice.

    Maybe it was me calling up "www.fuckroadrunnerdnshijackingisevil.com" and a few dozen alternatives, or maybe it was portscanning their server, or maybe th
    • Insight does the same thing. That is, until you manually change your DNS servers.
      • Well then I'm out of choices. So much for the fucking market taking care of things.

        Fuck those fucking motherfuckers, all of them.

        And fuck the FCC. Burn it to the ground. The role of government is not to line their citizens up to be ass-raped by business. If I wanted to live in that kind of society I'd move to fucking mainland China.

        The Founding Fathers would tar and feather Kevin Martin. He's a traitor to America.
  • And what, exactly is news about this?

    This split has already happened in Europe. My company, for example, bought the access part of AOL Germany, and that was a year ago. It was always just a matter of time until the same thing would happen in the US.

    And yes, there were layoffs. Mostly in the audience part, which fired about 75% of its people in two waves (one right after the split, one about three quarters later). The access part went well here, but I'm not sure about other countries. Some of the bidders, li

    • And what, exactly is news about this?
      It's news in the same sense that any article talking about SCO's demise is news.
  • Army of Lamers
  • If they know the ISP business is going down the tubes, and the advertising/search part is fine, why are they spinning off one knowing it's going to die off. Why don't they just exit the business. Seems like a lot of extra corporate footwork for the same result.

    • Because there's a good chance there's a sucker out there who doesn't know AOL's dial-up business is going down the tubes. Said sucker will pay good money for the spun-off property. Why throw something in the trash when you can get some cash for it and make winding it down somebody else's problem?

  • Even for paying customers who haven't signed up for them (signing up for them used to increase the web space allocation from 2 to 20 MB).

    William
    (who will have to install an ad-blocking script if AOL customer service won't reverse it for his account)

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