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.