TW Confirms Cable Unit Spin-off and Mulls AOL Future

02 May 2008

NEW YORK: Time Warner's decision to spin–off its cable television division has put the future of its troubled AOL web unit into sharp focus.

The media and entertainment giant plans to off-load its remaining 84% interest in the cable business in a move that will create a company valued at around $34 billion (€21.8bn; £17bn).

Following the spin-off, TW will concentrate its efforts on its content businesses including Warner Bros movie and TV studios, Time publications, HBO and CNN.

Comments ceo Jeffrey Bewkes (pictured): "We've decided that a complete structural separation of Time Warner Cable, under the right circumstances, is in the best interests of both companies' shareholders."

Bewkes has already indicated he plans to separate AOL's dial-up access business from its advertising supported content business.

However, he has not revealed any further details and is also tight-lipped about talks with Yahoo on combining their internet arms.

TW is under intense pressure from investors to increase the value of its shares, which have steadily fallen since its disastrous merger with AOL in 2001.

First quarter results reveal a slide in net profits from $1.2bn to $771m after $116m of restructuring costs. In addition, the level of AOL subscribers dropped 28% to 8.7 million.

Data sourced from Washington Post Online; additional information by WARC staff