Time Warner gets ready to spin off AOL

Jake Widman
Wednesday, 29 July 2009 06:29

Your IT - Home IT

In preparation for turning AOL into an independent company, Time Warner formally notified the U.S. Securities and Exchange Commission of its intention and bought back Google's stake in the former Internet giant.

Back in May, Time Warner announced that it planned to spin off AOL. Ironically, it was originally AOL that bought Time Warner in 2001 for US$147 billion.

The formal notification to the SEC is one step in that process, which Time Warner hopes to conclude before the end of this year.

AOL is still the number-four Web portal (after Google, Microsoft, and Yahoo) and has a profitable advertising platform, which will be the focus of the new business.

The plan is for Time Warner shareholders to own the outstanding interests in the independent company.

Also as part of the process, Time Warner re-acquired the five percent stake in AOL that Google purchased in 2005.

The repurchase price gives a clue as to AOL's current valuation.

For more on Google and AOL's value, see Page 2.