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AOL Staying With Time Warner For Now
By David Utter
Expert Author
Article Date: 2005-05-20
Rumors of a spinoff of the Internet service provider aren't true, says Time Warner's chief executive.
According to CNN, Time Warner honchos seriously considered spinning off AOL, a company it merged with in 2001. Making it a separately traded stock would give AOL the cash it needs to make acquisitions.
Time Warner plans to spin off its cable television unit in a similar fashion after it completes the Adelphia acquisition, done in conjunction with Comcast.
CEO Dick Parsons said a spinoff of AOL would be "unnecessary at this time." That speculation has been whispered as expectations for the merger's prospects dimmed over time.
AOL has been losing customers to faster or less expensive service providers regularly. The company hopes the hot Internet advertising market provides the model the company needs to maintain viability.
Shareholders were displeased with the company's plan to offer a 5 cent per share quarterly dividend, an amount they see as insufficient.
About the Author:
David Utter is a staff writer for WebProNews covering technology and business. Email him here.
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