Time Warner says goodbye to AOL for good
After eight years of losses, U.S. media giant Time Warner is drawing a line under the matter: The company is spinning off its loss-making Internet subsidiary, AOL, as of December 9, and distributing it to its shareholders.
AOL will be separated from the Group on December 9 and will be traded as an independent company on the stock exchange the following day, Time Warner announced on Monday evening after the close of trading. At the time of the merger in January 2000, AOL was valued at 163 billion dollars. The current market value of the Internet subsidiary would be 3.44 billion dollars based on the closing price of Time Warner shares.
Without AOL, the media giant wants to return to its roots with a focus on cable channels, film studios and the publishing business. Time Warner had long been looking for a new strategy or a partner such as Yahoo or Microsoft. A takeover of AOL by Google also seemed conceivable. However, none of this materialized. In view of the downturn in the Internet business and the bleak outlook for online advertising, AOL became more and more of a dead weight. In July, Time Warner bought back the remaining five percent of AOL from Google in order to initiate the spin-off of the Internet subsidiary. In contrast to Yahoo and Microsoft, which compete with Google on the search engine market, AOL boss Tim Armstrong wants to concentrate on online content, communication and advertising in future and, in return, give up the Internet access business.
Without AOL, the media giant wants to return to its roots with a focus on cable channels, film studios and the publishing business. Time Warner had long been looking for a new strategy or a partner such as Yahoo or Microsoft. A takeover of AOL by Google also seemed conceivable. However, none of this materialized. In view of the downturn in the Internet business and the bleak outlook for online advertising, AOL became more and more of a dead weight. In July, Time Warner bought back the remaining five percent of AOL from Google in order to initiate the spin-off of the Internet subsidiary. In contrast to Yahoo and Microsoft, which compete with Google on the search engine market, AOL boss Tim Armstrong wants to concentrate on online content, communication and advertising in future and, in return, give up the Internet access business.
