Time Warner Moves Toward AOL Split

08 August 2008

NEW YORK: Time Warner's frustration with underperforming online division AOL has deepened following its Q2 results and a 36% slump in group operating income.

The struggling internet unit is still in transformation from its original role as a subscription service to a fully-fledged advertising-supported web portal.

But its ad income during the period increased by just two percent over the same period last year.

AOL's difficulties weighed-down TW's overall performance, which saw a 26% slide in Q2 income to $792 million (€512m; £405.8m). Revenues rose 5% to $11.6 billion

TW says it is preparing to separate AOL's internet dial-up and advertising operations by 2009, a move that could trigger a sale or merger of either business.

In addition, the media giant is set to off-load its 84% stake in Time Warner Cable, which will net it around $9.25bn.

The conglomerate's publishing division, whose stable of titles includes People and Time, saw operating income fall 15%, the result of a 9% slide in advertising.

The company says growth in online advertising does not offset the deterioration of print. It also warned that sales appeared to be worsening in the current quarter.

Data sourced from Financial Times online; additional content by WARC staff