ABOUT TIME...
Looks like the powers that be at Time Warner (CEO Dick Parsons et al), have given their AOL division CEO Jonathan Miller the green light to utter the words many have been waiting for some time, including AOL founder and former CEO Steve Case. As the Sunday Telegraph reports today:
"Time Warner, the giant US media group, is considering the sale or demerger of AOL, the internet business it merged with in 2000, at the height of the last stockmarket boom.
In an interview with the Sunday Telegraph, Jonathan Miller, chief executive of AOL, admitted that the Time Warner board is already mulling over a break-up of the giant conglomerate. Asked about the possibility of AOL separating from Time Warner, Miller confirmed that the issue is now on the agenda following the sale of the group's broadband businesses in Europe.
He said: "It's possible, going forward. It's not a discussion that Time Warner has a problem with understanding or engaging in. Until we were on this present course, it wasn't even the right discussion. Now it becomes more interesting."
In a post back last December, I'd said:
"I've been of the opinion for some time that the best alternative for AOL is as a standalone company again. With the right, focused management, AOL as a standalone has some potent opportunities given the current "Web 2.0" trends and the broader Internet technology tail-winds, EVEN at this seemingly late date."
Since then, AOL within Time Warner has made some big moves, including a proactive push away from it's subscription business, to a web-based, ad-sales driven model, announced in early August.
So now that the trial balloon to "de-merge" AOL from Time Warner has been released, it's only a matter of time for an AOL transaction sooner than later. As AOL CEO Jonathan Miller put it:
"I don't believe there is a scenario whereby we could have an independent AOL. I think we would be bought as fast as we could draw up the papers," he said."
Better late than never, I'd say.
TWX management is finally making the right steps:
1) Increasing Dividends
2) Selling of its subscription businesses
3) The board also agreed to seek out an additional $500 million of cost savings by the end of 2007, raising its total cost cutting target to $1 billion over the next 22 months.
The management has finally come to its senses and is making the right moves. We should see a pickup in the stock if they stay on this track
Posted by: Yaser Anwar | Monday, October 23, 2006 at 03:52 PM