Time Warner To Divide AOL Internet Business

Hopes to increase strategic options

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Time Warner CEO Jeff Bewkes said today that the company plans to divide AOL’s Internet access business and its ad-supported audience business, which includes AOL’s online services and content.

Jeffrey Bewkes

"This should significantly increase AOL’s strategic options," Bewkes told analysts on a conference call. Bewkes also said the company will cut costs, including a reduction of corporate spending by more than 15 percent and a cost reduction at Time Warner’s New Line film studio.

Bewkes said the company’s 84 percent ownership stake in Time Warner Cable is not a good situation for either company. He said there would be more definite plans for cable when Time Warner reports first quarter earnings at the end of April.

The chief financial officer, John Martin, said it will take "several more months" to separate the AOL businesses because it was complex. Martin said AOL’s costs "will continue to be reduced and advertising should continue to grow" beginning in the second quarter of 2008.

"The results of all this is that we continue to expect AOL to maintain its overall profitability on a considerable scale," he said.

Time Warner To Divide AOL Internet Business
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