AOL Dial-Up Now Separated From Other Arms Of The Company; Time To Sell?

Posted Aug 4, 2008

Time Warner Inc. (NYSE:TWX) has successfully separated the dial-up services from the rest of the company.  This was essential for AOL because dial-up is losing an uphill battle against broadband offerings.  Time Warner is now interested in selling AOL’s content and advertising businesses including AOL Instant Messenger (AIM).  Or Time Warner may look into partnering with other companies.

The reason why there is a higher priority in selling or partnering another company with AOL is because of the influence on Time Warner’s stock price.  Time Warner’s stock has been declining due to the loss of AOL dial-up’s marketshare.  It took several months to separate dial-up from the rest of the company because staff members had to learn how to segregate the revenues and liabilities from the different arms of the company.

When Time Warner completes a transaction that involves selling off AOL’s ad/content business, then the dial-up business will be next.  AOL is valued at $2-$3 billion according to several financial firms, but Time Warner may be looking for more.  Google invested $1 billion in AOL several years ago for 5% of the company.  AOL currently has 8.7 million dial-up subscribers.

Related Links:
1. WSJ