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Technology Stocks : What about old Time Warner
TWX 98.770.0%Jun 15 5:00 PM EST
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To: sixty2nds who wrote (62)10/17/2005 5:49:52 PM
From: sixty2nds  Read Replies (1) of 102
 
06:12 TWX Time Warner: AOL suitors face a vexing split-up - WSJ (18.00 )

According to the WSJ, as suitors line up for a piece of America Online, one vexing issue has arisen: how to separate AOL's shrinking Internet-access business from its more attractive Web-content assets. None of the co's known to be expressing interest in taking a stake in AOL, Microsoft (MSFT), Google (GOOG), Comcast (CMCSA) and Yahoo (YHOO), has much interest in investing in the entire co. AOL as a whole is valued at about $20bn in the talks, divided roughly evenly between its two businesses. Suitors want a piece of the programming arm. The programming business is attractive b/c its content draws a big audience and it holds about a 10% share of the fast-growing Internet advertising mkt. The traditional Internet-access business is of less interest to the potential bidders for an AOL stake. While it is hugely profitable, it is losing customers at a rate of 2m a year. Given the close ties between the two arms, splitting AOL won't be easy. If Time Warner strikes a deal involving AOL, it will have to carve off the programming arm into a separate co, which would likely license its content to the Internet-access business. But it would likely be a complex licensing agreement that would need to include a formula for sharing advertising rev and assurances that the Internet-access business would continue to steer viewers to AOL's Web properties.
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