AOL has bought out a local news website called Patch.com.  Tim Armstrong invested seed capital in Patch.com back in 2007.  As part of the deal, Armstrong will not profit from the seed investment he put in.  However, he will receive his seed capital back through AOL shares once the company separates from Time Warner.

Armstrong’s seed capital was made through his private investment company Polar Capital Group.  Another acquisition that AOL announced is Going.com.  The price of both properties were not disclosed.

The full press release is available after the jump.

[via BusinessInsider]
(more…)

Turner Classic Movies turned 15 years old and they are celebrating by launching a social network.  The social network is called the TCM Classic Film Union and the URL is tcm.com/fan.  The social network has features such as profiles, movie fans, actor and actress fans, and rare photos and video clips centered around Turner Classic Movies.

There are over a million actors, directors, producers, etc. in the database to become fans of.  The TCM social network also has thousands of movies that people can become fans of.  Turner Classic Movies is a part of Turner Broadcasting System inc. and a subsidiary of Time Warner.

Some of the stars include Marlon Brando, John Payne, Bette Davis, John Wayne, Bing Crosby, Audrey Hepburn, Judy Garland, Humphrey Bogart, etc.  The classic movies in the TCM social network database include Ada, Casablanca, The Wizard of Oz, North by Northwest, and Gone With The Wind.

Last night the Board of Directors at Time Warner agreed to spin off AOL as its own entity once again.  AOL will become an independent and public company.

“We believe that a separation will be the best outcome for both Time Warner and AOL. 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,” stated Time Warner Chairman and CEO Jeff Bewkes

AOL currently reaches about 107 million unique visitors per month on all of their services.  AOL will continue to operate as an ISP too.

As of right now, Time Warner owns 95% of AOL and Google owns 5%.  After the spin off is complete, Time Warner will buy back the 5% from Google in the third quarter of 2009.  Time Warner shareholders will end up owning 100% of outstanding interests in AOL.  The transaction will be tax-free to Time Warner shareholders and is contingent upon review of the SEC.

In January 2000, AOL acquired Time Warner for $164 billion.  After the merger was complete, AOL began to see their ISP division profits plummet, causing them to report a loss of $99 billion in 2002.  Steve Case was removed as Chairman and was replaced by Richard Parsons.  “AOL” was dropped from the company name “AOL Time Warner.”

The press release of the spin off is available after the jump:
(more…)

[Jeff Levick]

AOL has hired Jeff Levick, a former executive at Google.  Levick will become the president of global advertising and strategy, who will directly report to new AOL CEO Tim Armstrong.  Armstrong himself was Google’s former North America ad sales head a couple of months ago.

“This is a perfect time to join AOL and I firmly believe that AOL’s best days are ahead of it,” stated Levick. “The company has one of the largest and most engaged audiences on the Web, some of the best advertising technology in the business, and a powerful third-party network. There is great opportunity here for us to capture.”

Greg Coleman was replaced by Levick.  The reason why he was let go is unknown.  Coleman joined AOL in February 2009.  That he was at AOL for less than 3 months!  Coleman was an advertising head at Yahoo! before AOL.

Time Warner Inc. (NYSE:TWX) stated today that they have named Google Inc. (NASDAQ:GOOG) SVP and President of American Operations as the new Chairman and CEO of AOL.  AOL’s current Chairman and CEO Randy Falco will be leaving along with President and COO Ron Grant.

“Tim is the right executive to move AOL into the next phase of its evolution. At Google, Armstrong helped build one of the most successful media teams in the history of the Internet — helping to make Google the most popular online search advertising platform in the world for direct and brand marketers. He’s an advertising pioneer with a stellar reputation and proven track record. We are privileged to have him preside over AOL as its audience and programming businesses continue to grow and its advertising platform expands globally. He’ll also be helpful in helping Time Warner determine the optimal structure for AOL,” stated Time Warner Chairman and CEO Jeff Bewkes.

[via Sys-Con]

“Both companies will be better positioned to compete, with capital structures more suited to their respective needs,” stated Time Warner CEO Jeffrey Bewkes.

Time Warner’s spin-off of Time Warner Cable should be completed by next month.  This will make Time Warner purely a media company.  Time Warner initiated the separation possibility of separating its telecommunications cable operations from their content units about four years ago.

This will enable Time Warner to focus on their major media brands such as CNN, HBO, Time magazine, Sports Illustrated, and the Warner Bros. movie studio.

The terms for separating the companies were agreed upon on May 20, 2008.  Since then, it was subject to the government regulation process.  Within the last few weeks, the separation was approved by the FCC and the IRS.  The separation should be complete by March 12.

[via NYT]

Eidos announced that they will accept a $120 million takeover deal from Square Enix to be acquired.  Square Enix is best known for their Final Fantasy series of games.  After the last Lara Croft game did not meet expectations, it was forced to renegotiate bank loans.  Eidos is based in Britan and Square Enix is based in Japan.

Two of Eidos’ major stakeholders Insight Investment Management and Cazenove Capital management agreed to the deal.  Time Warner also owns a 20% stake in Eidos.  Time Warner must accept the deal or make a counter-bid in order for the deal to go through.  The $120 million deal amounts to about 32 pence a share.  This is more than twice what Eidos’ current shares are worth.

Microsoft Corporation (NASDAQ:MSFT) Steve Ballmer and Yahoo! Inc. (NASDAQ:YHOO) Chairman Roy Bostock were spotted meeting at the Time Warner Center yesterday.  This took place two days after Yahoo! named a new CEO, Carol Bartz.

According to a tipster at Valleywag:
“On my way down the elevator, I was stopped on the 5th floor and in walk Roy Bostock and Steve Ballmer. Kind hellos were exchanged. As we entered the lobby they both walked out and seemingly proceeded to lunch together.”

Valleywag came up with several plausible conclusions out of the meeting here.  The first is that Microsoft is still interested in buying Yahoo!’s search business, but Bartz said that she wasn’t interested in getting to that right away.  Another possible reason is that Ballmer said he was ready to come back to the negotiation table when Yahoo! got a new CEO and both executives may have been in New York around the same time.

Given that they were meeting in the Time Warner building, my guess is that executives there may have wanted to arrange a deal between AOL, Yahoo!, and Microsoft.   Time Warner clearly wants to unload AOL somehow and Microsoft has a big enough wallet to take possession of AOL.  You never know what could happen when you put these three outfits in the same room.  More details as this story unfolds.

[via Valleywag]

Yahoo! Inc. (NASDAQ:YHOO) and Time Warner Inc. (NYSE:TWX) subsidiary AOL are currently in the due diligence stages for what could happen as a merger.  Both companies are finding out how much in costs they can save and how much money they can make together.

The talks are focused on how to merge AOL’s content and advertising business into Yahoo!  The AOL and Yahoo! merger talks were one of the possible alternatives to being acquired by Microsoft.  These discussions are taking place as Yahoo!’s advertising outsourcing deal with Google Inc. (NASDAQ:GOOG) is going through the regulatory process.

If the merger deal goes through, Time Warner would get stake in the combined company.  AOL and Yahoo! are being very cautious with the move because the deal carries “a lot of risk.”  Yahoo! would also gain control of AOL’s many assets.

AOL owns companies like Netscape, Moviefone, Spinner.com, Nullsoft, Quack.com, MapQuest, Advertising.com, Weblogs Inc., Truveo, MusicNow,  Userplane, GameDaily, Relegence, Third Screen Media, AdTech, Tacoda, Quigo, buy.at, Bebo, and Sphere.

RealNetworks, Inc. (NASDAQ:RNWK) should have saw this coming when they release their new controversial RealDVD software.  While RealPlayer already allows you to download any video from YouTube or powered by Flash, RealDVD allows you to rip DVDs and make back up copies.  RealDVD was officially launched today.  Six major studios announced that they are suing the software company over the software.

These studios believe that many of Netflix and Blockbuster’s customers would just burn the movies that they rent with the RealDVD software, thus causing them to lose out on a great deal of money.  The lawsuit was filed at the U.S. District Court in L.A. 

“The incentive for the consumer is obvious and all but overwhelming,” stated a request by the movie studios.  The request was for a temporary restraining order. “‘Why,’ he or she may ask, ’should I pay $18.50 to purchase a DVD when I can rent it for $3.25 and make a permanent copy?’”

RealNetworks defends their software by saying it is legal.  RealDVD is sold for $30 per consumer at $20 for up to four licenses after that.  The software copy is locked into the original owner’s hard drive and does not alter the encryption technology used by movie studios already.  Copying one’s own personal copies of a DVD is “fair use” by law. 

The movie studios stated that RealDVD violates the Digital Millenium Copyright Act to bypass technologies that prevent the copying of a DVD without permission of the copyright owners.  The movie studios that are suing RealNetworks includes Viacom, Inc. (NYSE:VIA)’s Paramount Pictures, Sony Corporation (NYSE:SNE)’s Sony Pictures, News Corporation (NYSE:NWS.A)’s 20th Century Fox, General Electric (NYSE:GE)’s Universal, The Walt Disney Company (NYSE:DIS) studio, and Time Warner Inc. (NYSE:TWX) Warner Bros.

Carl Icahn, John Chapple, and Frank Biondi had their first meeting as new Yahoo! Board members this past Monday.  What happened after the meeting?  A rumor that Yahoo! Inc. (NASDAQ:YHOO) may buy AOL from Time Warner Inc. (NYSE:TWX) for $5-$8 billion.  This time Yahoo! propositions “are more serious than has been reported” according to AllThingsD.

Time Warner CEO Jeff Bewkes stated that the future of AOL may be decided soon.  While the rumor is that Yahoo! is offering $5-$8 billion, Time Warner seems to be pushing for $10 billion.  This isn’t the first time this year that Yahoo! was forced to play the negotiation game.

Yahoo! did this same dance with Microsoft Corporation (NASDAQ:MSFT) in February.  Yahoo! wanted over $44.6 billion to be acquired by the software giant, which ended the talks between them a couple of months ago.  AllThingsD also pointed out that AOL doesn’t really have the best bargaining chips when it comes to make a deal happen.  AOL has been bouncing around with Compuserve, Netscape, and Time Warner and the best things have not come out of those deals.

To make things even more interesting Carl Icahn went on CNBC’s Fast Money on Friday, September 19 and stated that he thinks if Yahoo! doesn’t do something with Microsoft, Google will kill them.  Both Yahoo! and AOL are in a vulnerable position.  This is also why Yahoo! has enlisted Bain & Company to help them cut costs.

Below is the e-mail that Jerry Yang about the hiring of Bain:

(more…)

AOL.com, the #20 most visited site in the world is pushing their visitors to aggregate their e-mails on the homepage. This is an odd move since Time Warner Inc. (NYSE:TWX) AOL competes directly with Yahoo! Inc. (NASDAQ:YHOO) and Google Inc. (NASDAQ:GOOG).  On the contrary, Google owns 5% of AOL and has a partnership with Yahoo!  So technically AOL also has a partnership with Yahoo! through Google.

“With the launch of mail aggregation, AOL will be the first among the big traditional portals to offer a centralized email experience,” stated Bill Wilson, EVP of Programming at AOL. “We know that consumers today have multiple email accounts on different services to keep tabs on daily, and we want to make it easier for them. This is an important first step in opening up AOL.com and giving users the ability to populate the AOL.com homepage with content and services
they use on a daily basis, regardless of where it lives.” 

AOL also has a link to Hotmail connected to their homepage.  It is not as apparent as GMail and Yahoo! though.  On the left sidebar, AOL also added a link to Bebo, TMZ, StyleList, ParentDish, Wallet Pop, Asylum, and several other of their portals.

AOL has had a web version of AIM for quite some time now.  I haven’t used it in a long time, but I remember it was powered by Java last time I used it.  Recently Time Warner Inc. (NYSE:TWX) sent out a press release stating that AOL launched AIM Express, a Flash-based version of AIM.   The URL for the new AIM Express is at: http://www.aim.com/aimexpress.adp.

“AIM Express raises the bar with its streamlined design and lightweight messaging experience,” stated David Liu, SVP AOL People Networks. “It’s now even easier for AIM users, especially those on-the-go, to connect with friends whether at home, at a coffee shop, the library, or wherever they have Web access.”

The new version of AIM Express includes tabbed IM conversations, status messages, text message mode, buddy rollover, and browser compatibility.  AOL also launched an AIM platform that is compatible with the Windows Mobile operating system.

When I heard about this news, the first thought I had was Meebo already exists.  Why switch to AIM Express from Meebo?  I can understand why people would use the mobile version of AIM Express, but the Flash-based online version seems pretty useless compared to Meebo.  Using Meebo, users can sign on to AIM, Yahoo!, Google Talk, ICQ, MSN, and Jabber at the same time.

There are several other services that took Meebo’s offerings and one-upped them too.  For example, Digsby is another instant messenger and social network aggregator.  Digsby supports AIM, Yahoo, MSN, ICQ, GTalk, Jabber, Facebook Chat, etc.

Pidgin is another example.  Pidgin supports Bonjour, Gadu-Gadu, GTalk, Groupwise, ICQ, IRC, MSN, MySpaceIM, QQ, SILC, SIMPLE, Sametime, XMPP, Yahoo!, and Zephyr.

Will a lot of people use AIM Express?  Even though there are a plethora of alternatives for AIM Express, many people will end up using it because there is a link to it directly on AIM.com.  And everytime someone logs into the AIM desktop software, AIM.com is opened in the default browser unless it is switched off.  This increases the overall awareness of AIM Express.

TheWB.com is currently in Beta and is geared to launch on August 27.  Upon launch, TheWB.com will have full episodes of All Of Us, Roswell, Everwood, Blue Water High, Buffy the Vampire Slayer, Dangerous, Friends, Gilmore Girls, One Tree Hill, Smallville, The Wayans Bros., The OC and Veronica Mars.  TV producers, McG and Josh Schwartz will be releasing a couple of new shows on TheWB.com such as Sorority Fever. 

McG is the director and producer of Terminator 4, Supernatural, and the Charlie’s Angels movies.  Schwartz is the writer and producer of Gossip Girl, Chuck, and The O.C.

“The launch of TheWB.com represents a natural progression of the Warner Bros. Television Group’s digital strategy and complements our core business, which is based upon episodic storytelling, first-class distribution and providing value to partners through advertising in a premium environment,” stated Bruce Rosenblum, President of Warner Bros. Television Group (WBTVG).

TheWB set-up a Facebook application and a Facebook fan page as part of the launch.

“These hit shows still have an incredible amount of equity with their audiences, who grew up with these characters and went through significant events in their lives just as some of the characters did on the programs,” stated Brent Poer, General Manager of TheWB.com. “And now, through TheWB.com, users will be able to take an unprecedented level of control over their own entertainment experience by easily editing, remixing, and literally ‘playing’ with their favorite shows. We’re giving the users final cut.”

Johnson & Johnson (NYSE:JNJ) signed on as the charter sponsor for TheWB.com.  TheWB.com is a subsidiary of Time Warner Inc. (NYSE:TWX).

Related Links:
1. TheWB Beta
2. WB Press Release

Google Inc. (NASDAQ:GOOG) filed a report with the SEC this yesterday indicating that the 5% stake acquired in AOL LLC for $1 billion “may be impaired.”  Impairment means that an acquisition or investment is wearing away.

This may affect Google’s profits on their accounting books. 

“There can be no assurance that impairment charges will not be required in the future, and any such amounts may be material,” stated a Google spokesperson regarding the AOL investment.

One of the primary reasons for Google’s investment in AOL was to beat Microsoft Corporation (NASDAQ:MSFT) in an advertising bidding war.  Google was able to make deals with MySpace, Friendster, and AOL before Microsoft.  However, Microsoft won exclusive advertising deals with Facebook and Digg.  Google invested the $1 billion for 5% ownership in AOL in December 2005.

The bidding war drove AOL’s valuation up to roughly $20 billion.  Analysts believe that AOL’s values is now below $10 billion.  Within the last week, Time Warner Inc. (NYSE:TWX) stated that they were able to separate AOL’s dial-up entity from AOL’s Internet content and advertising entity on paper.

Earthlink Inc. may be a contender in buying AOL’s dial-up unit and both Microsoft and Yahoo! are rumored to be eyeing AOL’s online operations unit.  As a major shareholder, Google could also request Time Warner to buy back their stake in AOL or push for AOL to go public.  Google has not indicated the pursuitment of any of those options though. 

AOL was worth $240 billion at one point before the dot-com bubble burst.

Related Link:
1. Associated Press