AOL Up for Grabs
Despite continuing to acquire other companies, including Goowy and Buy.At marketing network, it looks like AOL is seriously losing steam. Time Warner CEO Jeff Bewkes announced today that the company would be undergoing major restructuring.
Bewkes said that they’ve already begun to split AOL into two divisions, one focused on advertising (presumably still called Platform A, as announced in September). The other, which I think will retain the AOL brand and subscribers, will be spun off and possibly sold.
CNNMoney mentions some of the reasons that Time Warner is shedding the company it acquired eight years ago:
The company saw a 32% plunge in revenue at AOL, as it lost 29% of the subscribers it had a year earlier. Operating income at the unit tumbled 70% due to the sale of its Internet access business in Great Britain and France.
However, AOL’s unit did beat expectations. On the other hand, I wouldn’t go as far as to agree with Bewkes, who said that Microsoft’s Yahoo bid “demonstrates the value” of AOL, since Yahoo is a competitor of AOL.
MediaPost reports that suitors for the company would include Comcast and eBay. Presumably, they’re interested in the advertising unit, but it hasn’t been confirmed that Platform A and AOL would both be for sale. It certainly sounds like splitting the advertising business off from the main AOL business would indicate that Time Warner wants to keep Platform A (or at least sell them seperately).
Additionally, Bewkes said that the split could “take several more months because it’s fairly complicated.”