Time Warner confirms AOL split

 

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By Reuters

Posted on 8 Aug 2008 at 10:51

Time Warner plans to split AOL's dial-up internet and advertising businesses into separate divisions by early 2009, a move that could make a sale or merger of either business easier.

Time Warner has also been in talks to combine the AOL advertising business with either Yahoo or Microsoft, while EarthLink signalled last week that it could be interested in buying the dial-up businesses.

AOL revenue fell 16% in the second quarter to $1.06 billion, reflecting a 29% drop in subscription revenue.

Executives say AOL's advertising growth rates will rise in the second half of the year partly due to improved traffic to its sites, but also because growth rates fell in the same period last year.

The company also intends to shed its cable services division, Time Warner Cable, by the end of the year, in a separation that will yield a $9.25 billion payment from its cable division.

Time Warner chief executive Jeffrey Bewkes declined to say how the company planned to spend the cash. But he says the company could pursue global acquisitions in areas it currently operates, such as TV and online networks or entertainment production companies.