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Time Warner (Finally) Ready To Hit Undo Key On AOL Deal

This doesn't exactly qualify as surprising news, but Time Warner has publicly declared that it's ready to divest itself off AOL, the company it merged with back in 2001. As fellow Post blogger Michael Rosenwald notes on The Ticker, a paragraph on page 5 in its latest quarterly filing (PDF) declares that:

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.

Pretty much every analyst in the business--not to mention AOL co-founder Steve Case--has been suggesting that Time Warner to do just that for years. The AOL merger quickly sank from a symbol of dot-com excess to a level of EPIC FAIL, as the kids say, costing both companies deeply. But although TW didn't wait too long to snip AOL's name off the merged company's moniker, it's taken much longer for it to start backing out of the deal altogether.

Time Warner's filing shows that the paid AOL service still dwarfs a lot of other Internet providers, with 6.3 million subscribers in the U.S. But that's well below its fall 2002 peak of 26.7 million U.S. subscribers (see also the graph of AOL subscriber totals, compiled by industrious Wikipedia contributors from years of TW filings).

I was once one of those subscribers... alright, maybe 15 years ago. Now, it's been a couple of years since I even bothered to install AOL's software on a test computer for research purposes; my advice is to get rid of that application entirely and switch to standard Internet programs that work with AOL's services. (Need to get saved mail out of the AOL program? See these two Help File items for links to programs that can automate the job.)

So you know, at least two dozen friends and colleagues of mine have worked at AOL over the years, and a handful still do. For their sake, I hope this company can find a niche that works--not as one of the remaining dial-up providers, but as a source of Web content, services and ads that can do its part to keep the likes of Google, Microsoft and (speaking of disastrous mismanagement) Yahoo honest. Getting out from under a large conglomerate that has bigger things to worry about is probably a good step towards that goal.

Do you think a spun-off AOL can do that? The comments are yours...

By Rob Pegoraro  |  April 29, 2009; 1:50 PM ET
Categories:  The Web , Tips  
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The concept was sound in theory, but the combination of being unable to converge businesses (not clear this was not pre-ordained), to merge management styles (ditto), and the end of dial-up just killed it. Wonder what might have happened if AOL had got into cable early on.

It's been noted in other contexts that those who know do not say and those who say do not know. Oh well, good try.

Posted by: DickWexelblat | April 29, 2009 4:42 PM | Report abuse

I believe the AOL/TW merger was [karmicly] allowed to happen so that Mozilla would be completed and Firefox would be born.

Still, a steep price any way to cut it for a browser whose real promise has now largely supplanted by KHTML. I guess the real boon is that Moz showed that a popular open source app could be made. /shrug Now I wonder if MS could have withstood monopoly complaints as well as it did if there was no Moz to highly IE's position of desktop power.

Posted by: WorstSeat | April 30, 2009 2:16 PM | Report abuse

AOL sold off its entire European operation as it couldn't make any money, but in that case didn't have the embarrassment factor of America On Line going down the pan. Silly thing is over here they did actually have broadband subscribers over competitive networks.

Their day has gone, there's better content delivered in a simpler manner without the brain numbing onslaught of advertising. Sell it off to someone willing to grab the subscriber base and put it out of its misery.

Posted by: cynical_observer | May 2, 2009 12:52 PM | Report abuse

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