Posted August 4, 2008 6:03 am by with 19 comments

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AOLIt 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.

  • Fifty Studio

    something needs to be done with that pit called AOL.

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  • Thomas Schmitz

    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 ( is #18 on the Fortune 500. Is history repeating itself?

  • Fifty Studio


    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

    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

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

  • Craig Mullins

    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

    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

    Thinking why Google doesn’t take part in the bidding…

  • Fifty Studio

    Why would Google want all those Internet subscribers?

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  • Erik

    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.

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  • Symbian

    Looks like AOL is dying.

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

  • PS3

    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.

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  • John Huckleberry

    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
    Hollywood Tonight LLC

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