Washington, May 28 (IANS) Time Warner Thursday announced plans to spin off AOL as an independent company calling the end to the January 2001 massive media marriage as “best outcome” for both companies.
“We believe that a separation will be the best outcome for both Time Warner and AOL,” said Time Warner chief executive Jeff Bewkes, in a prepared statement.
The $100 billion merger between AOL and Time Warner was applauded at the time as a visionary attempt to meld old media with new media. But synergies between the two never materialised, CNNMoney.com reported.
Times Warner’s stock has plunged about 80 percent since the merger. The company’s stock closed at $23 per share Wednesday, down from $115.13 Jan 10, 2001, adjusted for splits and dividends.
Time Warner currently owns 95 percent of AOL and plans to purchase the remaining five percent stake from Google. As AOL has steadily lost subscribers for its dial-up access business, it has tried to focus its business more on internet advertising.
Bewkes said an independent AOL will “have a better opportunity to achieve its full potential as a leading independent Internet company”.
Bewkes also described the separation as “another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content business”.
In March, Time Warner completed the spinoff of Time Warner Cable.
Even with that and the break with AOL, Time Warner will remain one of the largest media companies in the world, with cable networks, magazines and a movie studio. It is also the parent of CNNMoney.com.
The company owns the networks CNN and HBO, as well as the Warner Brothers movie studio and a wide array of magazines, including Fortune, Time and Sports Illustrated.