Posted February 6, 2008 12:59 pm by with 7 comments

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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.”

  • All this talk about selling search engines and merging etc. has me worried about the future of search engines. No competition means less innovation and it looks like it’s going to be easier now for the Internet to become as expensive as every other communication medium.

  • I hear you Jayson, though it’s not like there’s a lot of competition even now. Most of the time it seems like it’s Google and…umm…some other search engines.

    I do agree with you that we could use more competition instead of less. Will a joint Microsoft/Yahoo be able to compete better with Google than they could separately? Maybe, maybe not.

    I’m not sure AOL going away will make much difference.

  • “some of the reasons that Time Warner is shedding the company it acquired eight years ago”

    Of course the truly amazing thing about all of this, especially when you look at the companies now, is that AOL acquired Time Warner, not the other way round.

  • What they gonna do with theirs IM?

  • Wow, do we finally get to see the fall of AOHell? I doubt it will fold completely, but I’m glad to see that they are struggling… an AOL free internet is a better internet.

  • AOL has been digging its own grave since 2000. I blame it on lack of reputable and innovtive upper management.

  • Bewkes’ comment about the valuation of AOL is slightly rediculous. AOL and Yahoo can not be compared.