Time Warner Confirms AOL Spin-Off

by cyn.khoo | May 28, 2009 at 10:38 am

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Media conglomerate Time Warner has confirmed that it will spin off its AOL division, after buying the 5% share owned by Google in order to regain 100 percent ownership.

Time Warner Inc. will spin off the entire AOL Internet unit by the end of the year, reversing a failed $124 billion merger that triggered record losses.

AOL’s online advertising and Internet-access businesses will be separated into an independent, publicly traded company, New York-based Time Warner said today in a statement.

AOL will be spun off to Time shareholders and led by CEO Tim Armstrong, who has been involved in structural reorganization as the company increasingly became a burden on Time Warner's business and shares.

Armstrong has shuffled AOL executives as he tried to salvage a business in decline. The unit’s ad sales dropped 20 percent in the first quarter, after falling 18 percent in the fourth.

Time Warner CEO Jeff Bewkes announced in a statement that the separation will allow both companies to individually reach their full potentials. Market confidence in Time Warner seems to have risen slightly.