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Time Warner to Spin Off AOL?

Posted by timothy on from the concerted-effort dept.

image77 writes "The Washington Post is reporting that Time Warner is considering spinning AOL into a separate company via an IPO. You might recall that AOL bought Time Warner for over $100 Billion in 2001, and then went on to lose almost that much in 2002."

47 of 164 comments (clear)

  1. Aol is dying by guildsolutions · · Score: 4, Interesting

    AOL is a dying system. It was first used as a dial up connection with an interesting GUI. this is no longer what the end user wants. They still focus on dial up, versus the exploading broadband arena. IMO this is one of the first steps to its grave. Seperation of the company who's more or less holding it afloat.

    AOL? Hahaha you use AOL? damn dude.... I feel sorry for ya.

    1. Re:Aol is dying by DownTownMT · · Score: 3, Insightful
      They still focus on dial up, versus the exploading broadband arena.

      Actually, they are pushing AOL for broadband. But the thing is, why pay an aditional $14.95 when you already have to pay about $30 a month just for the cable modem service.

      They were great in the mid to late 90's when the only way to get on-line was through a modem. Hell even i used them up until about 3 years ago when cable became avaliable in my area. But the reality is that the company is on its way out, its just a matter of when.

      --
      "Insert Sig Here"
    2. Re:Aol is dying by ThePromenader · · Score: 5, Insightful

      ... I agree. AOL has by far outlasted its beginnings, and this only because of the "first web generation" (cough) educated to its (double cough) teachings (flashing gif, banner banner. Please click where you normally shouldn't have to click to continue so that you can look at this nice ad first).

      In today's market world, when a company (holding) wants to rid itself of its less profitable ventures, it must first isolate it and make it independant from its "parent" inter-financial network. If someone is gaff enough to take the (dangling) bait, great, but if not, it becomes an investment apart, becomes less (investor) interesting, wilts and dies.

      We've seen this story countless times over the past few decades, with only the logo that changes.

      --

      No, no sig. Really.

      ThePromenader
    3. Re:Aol is dying by kd5ujz · · Score: 2, Funny

      So you dont get jello on your sandwich. Or something like that.

      --
      -William
      God is everything science has yet to explain.
    4. Re:Aol is dying by Kirkoff · · Score: 2, Informative

      Back a long time ago, September was when new students would log on to usenet for the first time and it took a long time to get them to post productively. Once AOL got on usenet, there was a constant influx of new people. (Plus whatever you want to say about AOL users)

      --
      There are exactly 42,935,718 letter sized sheets in a square mile.
    5. Re:Aol is dying by EggyToast · · Score: 2
      That's because BT owns all of the lines so the rates end up rather similar. Broadband is priced quite differently in the US, so people would need to get broadband and then AOL on top of it, resulting in even more money.

      The price difference between $23 and $10 for dialup may not be that big of a deal to some people (they might like the features of AOL, for instance), but paying $60 instead of $45 when you just want a fast connection?

      Still, it would be quite ironic if AOL has to move to the UK in order to stick around as a company. They're likely to keep the name, I'm sure.

  2. If the new company still... by TWX · · Score: 5, Funny

    ...stays under the control of Time Warner but ends up going off and doing it's own thing then they should name it "AWOL"...

    --
    Do not look into laser with remaining eye.
    1. Re:If the new company still... by eobanb · · Score: 4, Insightful

      One of the reasons that Time Warner wants to spin off AOL (basically get rid of them) is that AOL is one of the stupidest companies I've ever known.
      Virtually all of AOL's assets, except for the wildly popular AIM, are worthless: their flagship subscription dialup service was killed by broadband (and a lot of people get broadband from Time Warner...). Netscape was killed by IE and now, Firefox (which came from Netscape's source...). Nullsoft's WinAmp was killed by iTunes, and meanwhile, AOL partners with Apple on iTunes. AIM is pretty much all that's keeping them going, and even that is being threatened (only on the horizon so far, but coming up fast) by XMPP. AIM (with IM, email, weather, news, games, and downloads) is essentially what AOL once was, but it's just all ad-supported now. When AIM goes down the tubes, replaced by Jabber, text-messaging, and h.264 video calling, America Online will be completely dead.
      TW understands this. They want to get rid of the liability that's AOL as soon as possible.

      --

      Take off every sig. For great justice.

    2. Re:If the new company still... by dwntwnboi · · Score: 2, Informative

      fyi, firefox does not come from netscape source. they are both based on code from the mozilla foundation's code which develops (netscape switched from their code base to mozilla code base when they bought mozilla few years ago). this is reflected in that every release of netscape is the previous release version of mozilla. firefox is just a streamlined web browser derived from mozilla as well, but it is an independant project not under the pervue of time-warner.

      as for winamp, netscape, and mozilla, they were all independant corporations at one point that time warner bought up to try to keep aol afloat. at least they got mozilla and winamp, which properly developed, could be even better than they are now, especially if not hindered byt the stigma and limited usership of aol and it's proprietary nature.

      aim is their only original service, but that might not even be true.

      winam

  3. About time, too - by Toby+The+Economist · · Score: 3, Insightful

    AOL buying TW was the greatest travesty of the dot com boom.

    --
    Toby

    1. Re:About time, too - by TubeSteak · · Score: 4, Informative
      AOL screwing over Justin Frankel
      (of Winamp, Gnutella, & WASTE fame)
      was a bigger travesty.

      The man was pure gold and the software he touched became golden too

      So what did AOL do? They put him on such a short leash that he quit.

      --
      [Fuck Beta]
      o0t!
    2. Re:About time, too - by HiThere · · Score: 3, Interesting

      Technically, it was an acquisition. In practice it was a merger...that is now unmerging.

      In some ways it's similar to HP's purchase of Compaq, where Compaq management ended up running HP into the ground (after running Compaq into the ground).

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    3. Re:About time, too - by OrangeTide · · Score: 2, Informative

      Justin has some money tucked away for retirement, but he's far from rich. He was paid in dot-com boom shares, and after the bust his shares were worthless like the rest of us. During that time you take some losses and some gains and just hope you come out ahead. I had fewer shares than most people of that time and I came out ahead of people who had a lot more shares.

      --
      “Common sense is not so common.” — Voltaire
  4. Market actually working? by TimmyDee · · Score: 4, Insightful

    Normally I'm skeptical of the market correcting the mistakes it makes, but this appears to be a case that might prove me wrong. The AOL-Time Warner merger sounded like a good idea on paper, but the two companies were already large enough that integrating their services and products was probably too great a hurdle, especially considering the time-frame under which it took place.

    Either that or the combined company was horribly mismanaged.

    --
    Per Square Mile, a blog about density
    1. Re:Market actually working? by VON-MAN · · Score: 3, Insightful
      "integrating their services and products was probably too great a hurdle"

      "Either that or the combined company was horribly mismanaged"

      Yes, both. Altough it could have been a marriage made in heaven!
      At this moment in time, big media and the internet do not mix easily for obvious reasons. When AOL made the merger with Time-Warner, AOL was hoping for a huge big load of content and Time-Warner was hoping for the mother of distribution channels. But as we all know, up till now there has not been a definite solution for online content distribution. At least, i have not seen it yet. So AOL and Time-Warner never had a chance to "consumate" the marriage. This split doesn't supprise me at all.

  5. Alright... by suitepotato · · Score: 3, Insightful

    ...who didn't see this coming?

    And how will AOL afford all the mail clogging CDs without siphoning off funds from Time Warner?

    AOL is being pushed back out the door to live on its own (like a middle-aged chronically unemployed geek being kicked out by mom finally). Oracle is still living under Darth Ellison. Netscape is using Microsoft's engine as an option (in an amazing display of tacit acknowledgement of defeat) even as Firefox continues to batter MSIE market share. If only they'd gotten together years ago...

    "You've got queries!"

    Oh well.

    At least they've still got legions of lusers to rely on... until they finally close their checking accounts to keep AOL from charging them for service they cancelled in writing six times over the course of a year.

    --
    If my grammar and spelling are off, I am [distracted/tired/careless] (take your pick)
    1. Re:Alright... by sabernar · · Score: 4, Informative

      Don't mark this guy Insightful. AOL is actually a big money maker for Time-Warner. Take a look at the numbers. Just because they don't make as much as they used to, they're still in the black. They actually make a lot of money, and they don't have to "siphon" funds from the parent company.

      Do your researching before spouting lies and half-truths.

    2. Re:Alright... by jez9999 · · Score: 2, Funny

      AOL is being pushed back out the door to live on its own (like a middle-aged chronically unemployed geek being kicked out by mom finally).

      I love it when you use analogies that we can understand.

      --
      == Jez ==
      Do you miss Firefox? Try Pale Moon.
    3. Re:Alright... by Valar · · Score: 2, Insightful

      The numbers
      Check note 7.

      In summary: Last quarter, AOL made 324 million dollars in operating income last quarter. That's only 18% of TW's 1,779 million operating income.

      --

      ====
      Crudely Drawn Games
  6. asdf by Demoknight · · Score: 2, Interesting

    who needs AOL anymore?
    thought AOL got the better end of the merger deal because they picked up TW's content?... content is king and always will be... why do you think bit torrent is the most popular thing on the net right now? its the only way we're able to get the content we want.

  7. *confuzzled* by JamesTRexx · · Score: 3, Interesting

    AOL bought Time Warner, and now Time Warner decides to spin off AOL? Who's the boss of whom here?

    --
    home
    1. Re:*confuzzled* by nanojath · · Score: 3, Interesting

      I imagine when it came down to business, the components and leaders capable of making (or avoiding losing, as the case might be) the most money ended up running the show.

      --

      It Is the Nature of Information to Transgress Artificial Boundaries

  8. What's next? by VON-MAN · · Score: 4, Funny

    AOL to spin off CompuServe?

  9. It was just a .com trying to legitimize.... by PornMaster · · Score: 4, Insightful

    The AOL purchase of Time Warner was just a way for AOL to try to use its share price to turn into something lasting. They knew at the time that their business was heading towards obsolescence. This was rather inevitable.

    --
    500GB of disk, 5TB of transfer, $5.95/mo
    1. Re:It was just a .com trying to legitimize.... by sourabhkothari · · Score: 3, Insightful

      it was not a matter of getting legitimate but how a corporation needs to change with time. innovation is the key for a company. either you change the world or the world changes you. aol didn't do it and paid for it.

  10. Time Warner was getting sick of AOL by jZnat · · Score: 5, Funny

    Time Warner later mentioned that they were sick of their employees spending all day chatting on AIM and claiming they were "beta testing" the next release.

    --
    'Yes, firefox is indeed greater than women. Can women block pops up for you? No. Can Firefox show you naked women? Yes.'
  11. Technically.... by fm6 · · Score: 5, Informative
    AOL did indeed buy Time-Warner, but it was really a merger. At the time, nobody realized (that they'll admit) how inflated AOL stock was, so it seemed to make sense to structure the merger as acquisition. That allowed them to pay for the merger simply by giving AOL stock to Time-Warner shareholders and renaming AOL as "AOL-Time-Warner".

    "AOL bought Time-Warner", while technically correct, is pretty misleading, since Time-Warner management initially had an equal role in the combined company. And "equal" soon changed to "dominant" as it become more and the AOL part would never lived up to initial expectations, and shareholders granted more and more authority to the Time-Warner part.

  12. This is like chicken livers... by Esion+Modnar · · Score: 4, Funny
    wrapped in half-raw bacon. Followed by a 12-pack of beer. Followed by a ride on the Tilt-a-Whirl.

    You just know it's all coming back up.

    --

    They say the first thing to go is your penis. Well, it's either that or your brain. I forget which...
  13. Say it ain't true by inkswamp · · Score: 2, Insightful
    You mean, merging already massive and powerful corporations into mammoth mega-corporations might not be such a good idea after all? You mean, nonstop, mindless growth in business might not be inherently good? You mean consolidating more and more power into fewer and fewer hands might not make the world a better place?

    Gees, I must be some kind of genius because I've been saying that for years.

    --
    --Rick "If it isn't broken, take it apart and find out why."
  14. Conglomerations and Backfiring by Crimson+Dragon · · Score: 4, Insightful

    Well, this just proves that money isn't everything. Around the time of the merger, one of the largest corporations on earth was being created. It was the greatest thing to happen to the corner of Wall and Broad in decades. Stock analysts gushed over the seemingly invincible titan.

    What on earth happened?

    It seems that AOL has lost its unique luster... the early days of the burgeoning internet long since past. The prime days of AOL were seen when there was no other way for Johnny Nontechie to get information from the internet with any kind of ease of use. It, arguably, represented one of the first comprehensive portals accessible to the end-user.

    The Internet grew, and AOL stopped being so unique. A failure to diversify and many flawed versions of the AOL software later, its popularity has waned. Time Warner has diversified its Roadrunner offering to add portal features, and so has everybody and their mother....

    Absorbing antiquated business models in lateral merger never makes for a good formula unless you plan to do something with the antiquated business model (you know, innovation and the like?). Was it planned to boost Roadrunner's position? Was it a lack of foresight? Who knows.

    It will mercifully end soon enough, this failed experiment.

    --
    The Crimson Dragon
    1. Re:Conglomerations and Backfiring by Homology · · Score: 2, Insightful
      Absorbing antiquated business models in lateral merger never makes for a good formula unless you plan to do something with the antiquated business model (you know, innovation and the like?).

      Most of these huge mergers fails to deliver. However, many decsion makers profited personally from it.

    2. Re:Conglomerations and Backfiring by Anonymous Coward · · Score: 2, Insightful

      There's no mystery about this at all.

      If anyone had bothered to ask any techie about AOL at it's most invincible peak, there would be only one possible answer forthcoming: "It's crap, and it's irrelevant, and there's nothing actually there".

      The fact that business people use some wierd form of non-Euclidean accounting that values form and hype over substance has always seemed wierd to me. They saw size and broad presence in AOL, and thought that they represented large asset value. No, they merely represented a large liability.

      AOL is now sinking back to its natural ground level, and it'll go negative before it disappears because of its enormous inertia. TWC at least has some real in-depth assets, and shedding the concrete overcoat of AOL makes sense. Quick, before it's too late.

  15. Their ages?? by stevejsmith · · Score: 2, Insightful

    Does anyone else find it bizarre that throughout the article they keep telling us how old everyone is? And that they tell us twice that this "Parsons" fellow is 57? Why in the hell are the ages -57 and 50, extraordinarily normal ages for executives -of these people at all significant??

    1. Re:Their ages?? by Shai-kun · · Score: 5, Funny

      I have a suspicion "Parsons, 57" and "Miller, 50" are actually their names.

      --
      ...or so I've been told.
    2. Re:Their ages?? by Hatta · · Score: 4, Funny

      Why in the hell are the ages -57 and 50, extraordinarily normal ages for executives -of these people at all significant??

      I'd have to say -57 years is a rather unusual age for an executive. Or for anyone else for that matter.

      --
      Give me Classic Slashdot or give me death!
  16. Re:Price Competition by Penguinoflight · · Score: 3, Informative

    Their effort to compete with NetZero is accomplished with their own Netscape dialup service. It might still be a good idea to lower the mainline AOL prices to be in better competition with other dialup providers.

    --
    "And we have seen and do testify that the Father sent the Son to be the Savior of the World"
    1 John 4:14
  17. TW to spin off AOL, huh? by FlyByPC · · Score: 4, Funny

    Speaking as an aviation enthusiast, I hope they start the spin too low and too slow!

    --
    Paleotechnologist and connoisseur of pretty shiny things.
  18. Profit? by russotto · · Score: 3, Funny

    Is it possible to buy short into an IPO?

  19. Hey here's an idea by coupland · · Score: 3, Funny

    If AOL makes enough money with their IPO, maybe they can afford to buy a big media company. :P

  20. A moronic business move. by supabeast! · · Score: 4, Interesting

    In the years since the AOL/TW merger/buyout the two companies have had numerous chances to unite their collective business models. How hard would it really be to turn AOL into a subcription service that provides access to a massive amount of content - magazines, books, music, television, movies - with tiered access options, one of which would include the old AOL ISP service? Success would be almost guaranteed, after all, the two companies had some of the best marketing departments in the world, given that they both made the majority of their money by convincing people to spend billions of dollars on overpriced entertainment.

    This has to be the biggest missed opportunity of all time. If the shareholders were smart they would sieze this last chance to revolt, replace the board with people who have spines, and fire the entirety of the AOL/TW senior management, replacing them with some visionaries who actually deserve to handling a company with so many great possibilities, and not a bunch of worthless cowards afraid to transform the company into the world's first digital entertainment empire.

  21. Please. by Anonymous Coward · · Score: 2, Funny

    Wow, that was an impressive display of one-liners and empty quips. If you haven't already, I'd strongly suggest a career in a monthly tech magazine of your picking. You'd fit right in.

    [...] even as Firefox continues to batter MSIE market share.

    Not even breaking 10% doesn't exactly inspire images of battery. But, hey, whatever gets you those mod points...

  22. Good riddance -- to Time Warner, that is. by IGnatius+T+Foobar · · Score: 3, Interesting

    Time Warner is the worst thing that ever happened to AOL. Yes, you heard me right. The moment Parsons stepped in, AOL lost its soul. Parsons was more than happy to sell out to Microsoft, putting the final nail in Netscape's coffin and killing off the possibility of a future in which tens of millions of AOL subscribers would have a Gecko-based browser embedded in their client software. If it weren't for TW and Parsons, IE's market share might be somewhere around 50-60% today.

    I'd love to see AOL spun off, and Steve Case put back at the helm. I'd love to see Bill Gates dartboards put back in place at AOL. I'd love to see a plucky independent AOL taking stabs at Microsoft on a daily basis again. Let's see it happen. If this breakup happens, as far as I'm concerned it'll be good riddance to Time Warner.

    --
    Tired of FB/Google censorship? Visit UNCENSORED!
  23. Synergy! by rlp · · Score: 2, Interesting
    The merger was done with promises of amazing synergy. Here's what TW looks like today:

    • AOL - losing market share
    • Publishing (Time, People, etc.) - losing market share
    • The WB (TV) - yeah, right!
    • Movies - 'Harry Potter' did well, but 'Troy', 'Oceans 12', 'Polar Express'??? New Line Cinema did Rings Trilogy
    • CNN - losing market share
    • TW Cable - seriously kicking Telco butt!


    So you have a bunch of disjoint units some doing well and some doing poorly. Were I a shareholder I'd want to see the whole thing broken up.
    --
    [Insert pithy quote here]
  24. AOL don't own Mozilla. by Aldric · · Score: 2, Informative

    When it become quite clear that Netscape was worthless to AOL, they made it open source. The open source community looked at the code and rewrote it from the ground up. So, Mozilla is loosely descended from Netscape. They may be partially funded by AOL, but they are not owned by AOL.

  25. TW in control? Shame on them. by Erris · · Score: 2, Interesting
    At the time, nobody realized (that they'll admit) how inflated AOL stock was, so it seemed to make sense to structure the merger as acquisition. ... Time-Warner management initially had an equal role in the combined company. And "equal" soon changed to "dominant" as it become more and the AOL part would never lived up to initial expectations ...

    I see it more as TW destroyed AOL with mailice and self destructive spite. AOL with full ability to distribute TW content would indeed have lived up to expectations. TW made themselves dominant and eliminated the world's largest ISP as potential competition by NOT letting AOL distribute said content. AOL under TW has not only stagnated, they have fallen behind. It's destruction is a shameful reflection on TW's missmanagement. If you can't make money with AOL style control over the largest online group in the world, there's something seriously wrong with you or you intended to destroy it from the beginning.

    Old media won, for a while. Of the new media companies, AOL, M$, Napster, MP3.COM, only M$ is left and they are owned. Who else is there to compete against the 4 big music publishers and the one or two movie publishers? Creative commons will undo the greedy morons.

    --
    DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
  26. Overpriced at $9.99 by poptones · · Score: 3, Informative

    I live in the sticks, dialup is all I can get. and I got sick of paying twenty bucks a month when so many are offering it for half, so I decided to go with Netscape's bargain offer.

    It's not even worth it at half the price of "regular service." they DO NOT support anything besides windows and even if you are lucky enough to get on you still get to deal with AOL's sucklicious proxy nest. the only way I was able to reach secure sites like paypal and my bank from behind my IP Cop router was to create a tunnel to a third party server and connect from there, somehow AOL has managed to completely screw up this part of the service.

    They don't support Mozilla or Firefox or any of their own products and in fact they have these special applets that REQUIRE you to run windows lest you be forever unable to reconnect after the first time some tiny thing goes wrong with your account.

    I never would have believed anyone could screw up simple DIALUP service so incredibly badly... until I dropped them and tried Netzero. But that's a whole 'nother rant, suffice to say I am back to paying twenty bucks a month to a local ISP for dialup and I'm not likely to be complaining about the price anytime soon.

  27. A collective sigh of relief by MrCopilot · · Score: 2, Funny
    was heard from Bugs, Bats, Supes and Cartoon fans all over the world.

    I was just waiting for the Superhero Themed AOL "Browser".
    Always did give me a shiver.
    AOL owns Batman?, Superman, Bugs, Daffy, and no not FogHorn Leghorn? NooooOOooooooOooo

    --
    OSGGFG - Open Source Gamers Guide to Free Games