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Time Warner To Spin Off AOL

Posted by samzenpus on from the goodbye dept.

Hugh Pickens writes "Time Warner is inching closer to untangling one of the worst mergers in American corporate history that began with the merger of Time Warner with America Online, a deal that has resulted in the evaporation of more than $100 billion of shareholder value. "Although the company's board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner's stockholders, in one or a series of transactions," Time Warner said in the filing. Tech industry analysts have speculated for years that Time Warner would spin off AOL; the two companies merged in 2001 with the idea that AOL's strengths as a new media company could benefit an old media company like Time Warner, and vice versa. But few synergies ever arose from the marriage and even AOL founder Steve Case, who is no longer with the company, has said that he believes the two companies should be separated."

11 of 141 comments (clear)

  1. What was AOL for, again? by roc97007 · · Score: 4, Interesting

    I mean, like you couldn't see that coming. AOL only had relevance when there was still a big dial-up business. They were a media company only in the sense that they were adept at scraping an eclectic batch of content from other sources and surrounding them with blocky, juvenile graphics.

    Broadband to the home made AOL redundant. Without Time Warner to prop it up, AOL would have ceased to exist years ago.

    Or, maybe not... I am continually astonished at the number of people with cable or DSL to their home who think they need a third-party ISP on top of the ISP they already have, by definition, with their broadband service. In that respect, AOL has been a marketing phenomenon, continuing to sell services long after those services became largely unnecessary. But that's not a sustainable business model. (Nor is making it as difficult as possible to quit.)

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    1. Re:What was AOL for, again? by Ceiynt · · Score: 5, Interesting

      I reember when broadband service started to eat away at dial-up. AOL was offering AOL Broadband. It was just the AOL face over your existing, always connected connection. Internet Explorer brought to you by AOL, with AOL as the home page, and the crappy AOL email service. People bought into that for a while, then realized that if they just clicked on the blue E, they had internet, without some sort of AOL overlay.
      A friend of mine still uses AOL dial-up at I think $24.99 a month, when he can use his phone company for broadband for less then $20, because he's used AOL for the last 10 years and that's all he knows. I downloaded firefox last time I was over there and blew his mind by minimizing his AOL window crap and pulling that up. He thought that was neat, but it didn't look like AOL so he had no idea how to navigate to a different web site, using a real web browser.
      AOL, your 15 minutes are over, please turn the lights out when you leave, maybe Time Warner will wither away in the darkness of an antiquated media format.

    2. Re:What was AOL for, again? by EvanED · · Score: 3, Interesting

      AOL had things like online encyclopedias and other "premium" content.

      They had some nice repositories of code samples and game add-ons and stuff like that. I remember downloading a bunch of addon planes and scenery and stuff like that for the MS Flight Sim back in the mid-90s.

      There was just far less on the web itself at that point, and finding the stuff that was there was harder as it was before the days of Google and pretty good search results.

  2. There Must be a Pony in Here Somewhere by Sarusa · · Score: 4, Interesting

    The book 'There Must be a Pony in Here Somewhere' is a great read about this whole debacle.

    To spoil the title, it's about how a small pile of steaming horsecrap is just a pile of steaming horsecrap, but if you get a HUGE pile of it, then start digging, because there must be a pony in here somewhere. At least that was Time Warner's theory.

    http://www.amazon.com/There-Must-Pony-Here-Somewhere/dp/1400049644/

  3. Comment removed by account_deleted · · Score: 4, Interesting

    Comment removed based on user account deletion

  4. Question is who wants to buy AOL? by Orion+Blastar · · Score: 4, Interesting

    Microsoft could buy AOL and merge it with MSN.

    AT&T could buy out AOL and merge it with their ISPS and Yahoo.

    Oracle could buy out AOL and merge it with Sun, and port the AOL software to Solaris and SunOS.

    Google could buy out AOL and turn it into GOL or Google Online.

    Nobody can buy out AOL and let them go into bankruptcy with all of their debt.

    AOL was a crappy ISP with bloatware for their connection software. Almost every service that AOL provides one can get for free or almost free on the Internet. Before the Internet explosion, AOL was something like Prodigy, CompuServe, et al because there was no world wide web. I can remember when AOL was Commodore 64 GEOS based, before it was ported to Windows and the Mac.

    The best part of AOL was Netscape, but they even got rid of that.

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  5. Hindsight is 20/20 -now look at facebook & twi by cryfreedomlove · · Score: 4, Interesting

    AOL based their entire business on local dial up and they had no plan for transitioning to broadband. Any fool can see that in 2009 and their valuation at the time of the merger looks silly in hindsight.

    Where do we see the same thing today? How about Twitter and Facebook? We've detected some outrageous valuations but there is no plan for either to move to becoming a self sustaining business.

  6. Re:You've got Discs by Antique+Geekmeister · · Score: 4, Interesting

    I met a man who made Society for Creative Anachronism scale armor out of sliced up AOL disks. I tried it on and got hit a few times: it was surprisingly light and effective armor.

  7. AOL == AIM. Ballmer is opening his checkbook. by IGnatius+T+Foobar · · Score: 4, Interesting

    Perhaps everyone is missing the important asset here: AOL Instant Messenger. It's still the leader in instant messaging. I'll bet Microsoft would love to force-march the AIM user base to "Windows Live Instant Messenger" (or whatever they call it).

    For a monopolist with a war-chest full of cash like Microsoft, it's worth buying AOL and throwing the rest of the company away just to get AIM users.

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  8. Re:Hindsight is 20/20 -now look at facebook & by LateArthurDent · · Score: 2, Interesting

    AOL based their entire business on local dial up and they had no plan for transitioning to broadband. Any fool can see that in 2009 and their valuation at the time of the merger looks silly in hindsight.

    Dude, I know hindsight is 20/20, but everyone except Time Warner executives knew the merger was a bad idea back in 2000. Another person above posted this article from The Onion from back then.

    I remember every single person I knew going, "what the fuck?" when we heard of the merger. It was 2000! I was wasn't exactly living in an urban metropolis, but I already had had access to broadband for over a year. Everyone knew AOL was going to crumble and quick.

  9. Yeah, but... by symbolset · · Score: 2, Interesting

    have you seen the throne?

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