AOL and Time Warner file for divorce

 

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By Reuters

Posted on 28 May 2009 at 15:26

Time Warner has made made official plans to separate its AOL division sometime around the end of this year, a widely expected move that sheds one of the media company's weakest divisions.

Time Warner, which for months has signalled such a plan was in the works, says the deal has been approved by the board and will be structured as tax-free to its stockholders. It still needs regulatory approval.

Once completed, the deal would once again make AOL an independent, publicly-traded company, and close the door on a massive merger between the two media companies in 2000 that failed to live up to its promise.

AOL was once how most people found their way on to the internet. It has since been left behind as a relic as rival ISPs and phone companies picked off subscribers and Google and others swooped in to dominate online advertising.

At the moment, Time Warner owns 95% of AOL, with Google holding the rest. Time Warner plans to purchase Google's stake then separate AOL.

Earlier this year, Time Warner chief executive Jeff Bewkes lured former Google executive Tim Armstrong to head AOL with the possibility of leading a separation.