In a press release yesterday Time Warner announced that its board has approved a plan for a complete legal and structural separation of its ISP subsidiary AOL, which will become a publicly listed standalone company. The entertainment, communications and media group’s CEO Jeff Bewkes said: ‘The separation will be 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 businesses. The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent internet company.’ In February 2009 Time Warner received regulatory permission to spin off triple-play cable network operator Time Warner Cable. The Time Warner group also includes corporate services provider Time Warner Telecom, broadcasters Turner and Home Box Office, the Time publishing group, plus the Warner Bros film company.
Time Warner currently owns 95% of AOL, and Google holds the remaining 5%. As part of a prior arrangement, Time Warner expects to purchase Google’s 5% stake in the third quarter of 2009. Once the proposed spinoff is completed, Time Warner shareholders will own all of the outstanding interests in AOL. The transaction is expected to be completed by the end of this year, contingent on completion of a review by the Securities and Exchange Commission.
According to the press release, AOL will focus on growing its web brands and services, which currently reach more than 107 million domestic unique visitors a month, as well as its advertising business, which operates the leading online display network that reaches more than 91% of the domestic online audience. AOL will also continue to operate one of the largest internet access subscription services in the US.