Time Warner to Split and Sell AOL?

Monday, August 4th, 2008 by Andy Beal

Time Warner to Split and Sell AOL?

AOL It seems that Time Warner has had enough of AOL, so it’s expected to announce its division and seek buyers, according to the WSJ.

If the paper is correct, Time Warner will split AOL’s dial-up services from its online advertising unit and seek a buyer for one or both new entities.

Both Microsoft and Yahoo have expressed an interest in the more lucrative online advertising unit, with Yahoo apparently offering more than what Wall Street estimates it’s worth.

The Yahoo discussions have valued AOL at around $10 billion, excluding the dial-up business. In contrast, Time Warner’s current stock price — around $14 — suggests a value of no more than $3 billion to $4 billion for the ad-sales and content businesses, some analysts say.

Meanwhile, Earthlink might be the one to snap-up AOL’s dial-up business.

Analysts value the business at only $2 billion to $3 billion, but Time Warner is expected to seek more than that in any sale discussion, according to people familiar with the situation. Despite having been in decline for several years, the business is still profitable and generates a predictable stream of cash.

It seems very much like a case of the parts being greater than the sum–with Time Warner likely to hold out for top dollar for both.

Who knew that a dial-up business could be worth $3B? With the increased adoption of broadband, it seems like a good time to get out of that business.

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19 comments on “Time Warner to Split and Sell AOL?”

Fifty Studio Says:

August 4th, 2008 at 11:08 am

something needs to be done with that pit called AOL.
Microlives « Says:

August 4th, 2008 at 11:37 am

[...] news clips about AOL today. While one was about Time Warner thinking of splitting up and selling AOL, the other two were more interesting to me – AOL’s acquisition of Social Thing a [...]
Is AOL for Sale? Who Will it Be Sold To? | The Inside Angle Says:

August 4th, 2008 at 12:15 pm

[...] Paid SearchAOL for Sale? Yahoo, Microsoft, & Google Opening Their Wallets?08.04.08 | Permalink | submit_url = ‘http://www.theinsideangle.com/2008/08/04/aol-for-sale-yahoo-microsoft -google-opening-their-wallets/’;Marketing Pilgrim is reporting from a WSJ article about AOL being prepared for a sale. With the competition for search market share being as fierce as it is, Time Warner is expecting to sell AOL for more than it’s actually worth. Yahoo has already been in discussions with AOL regarding a sale for $10 billion, at least $6 billion more than its true estimated value. [...]
Thomas Schmitz Says:

August 4th, 2008 at 12:21 pm

Shades of Foremost-McKesson. A long time ago the much smaller Foremost bought McKesson and created Foremost-McKesson. But McKesson loyalist and investors eventually jettisoned the Foremost part of the name and later the business units. Today McKesson (http://tinyurl.com/57rr5j) is #18 on the Fortune 500. Is history repeating itself?
Fifty Studio Says:

August 4th, 2008 at 1:15 pm

@Thomas

AOL has huge potential, and I think you’re point is valid. AOL seems like the little right fielder on your little league team who just needs a better chance to play, only to become the star.
Blue SEO Says:

August 4th, 2008 at 2:43 pm

Yes, unfortunately AOL does still have huge potential because it is so family friendly… for some reason Mom’s seem to love it, I still don’t understand why… I suppose it is very user-friendly (in some way). I’m sure the ad revenue on AOL is huge, and could only get better with the right team behind it.
Web Marketing Man Says:

August 4th, 2008 at 3:45 pm

AOL is a has-been entity, and it seems like Yahoo! is truly intent on harming themselves….
Craig Mullins Says:

August 4th, 2008 at 4:20 pm

AOL just needs to reinvent itself. With all those customers & such a huge following they could be great again.

I still use AOL. I love their email system.
Utah SEO Pro Says:

August 4th, 2008 at 8:42 pm

I think it’d be a good idea. AOL needs to find themselves.

Utah SEO Pro’s last blog post..Mobile SEO – SMX Local Mobile 2008 Presentation
Tiffany Says:

August 4th, 2008 at 10:51 pm

Thinking why Google doesn’t take part in the bidding…
Fifty Studio Says:

August 5th, 2008 at 12:26 am

Why would Google want all those Internet subscribers?

Fifty Studio’s last blog post..Win Batman Dark Knight tickets
Search Engine News » Time Warner to Split and Sell AOL? Says:

August 5th, 2008 at 7:03 am

[...] More from http://www.marketingpilgrim.com…; [...]
Erik Says:

August 5th, 2008 at 7:45 am

Even if yahoo buys AOL it’ll become a Microsoft company sooner or later. Might as well go directly to them.

And as for Google, they may be in the bidding and we don’t even know it. They came out of left field to snatch up some Yahoo stake when the MSFT deal was faltering. Could do the same here.

Erik’s last blog post..Wordpress User Video Upload Script as a PHP Consultant
101 Ways to Promote Your Web Site: Filled with Proven Internet Marketing Tips, Tools, Techniques, and Resources to Increase Your Web Site Traffic (101 Ways series) | Internet Marketing Marketing Strategies Marketing Resources | Marketing Idea Says:

August 5th, 2008 at 9:04 am

[...] Time Warner to Split and Sell AOL?It seems that Time Warner has had enough of AOL, so it s expected to announce its division and seek buyers, according to the WSJ. If the paper is correct, Time Warner will split AOL s dial-up services from its online advertising unit … [...]
Symbian Says:

August 7th, 2008 at 5:24 am

Looks like AOL is dying.

Symbian’s last blog post..Nokia Chat – new location based messenger
PS3 Says:

August 7th, 2008 at 4:08 pm

AOL was my first ISP, brings back good memories, amazing it was the fastest dial-up around.

They have done well with such a cumbersome interface to be totally honest.
delade | Google Loses Mad Money on AOL Investment; Maybe it Should Hire Jim Cramer? Says:

August 9th, 2008 at 5:33 am

[...] is now worth, but speculation is that it may be as much as 50% less than the B it invested. Last time we checked, analysts gave AOL a total value of less than [...]
John Huckleberry Says:

August 10th, 2008 at 11:43 pm

Hollywood Tonight LLC, The company I’m CEO of, is interested in AOL LLC as a whole unit at 15 billion. There will be press releases this week to confirm it.
John Huckleberry
CEO
Hollywood Tonight LLC
manu prasad » Microlives Says:

January 19th, 2009 at 3:56 am

[...] news clips about AOL today. While one was about Time Warner thinking of splitting up and selling AOL, the other two were more interesting to me – AOL’s acquisition of Social Thing, a [...]

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