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Time Warner Closer To Spinning Off AOL

Time Warner may be preparing to tell investors as early as tomorrow that it's close to spinning off AOL, enabling the media giant to focus on its films and cable TV assets. As recently as February, CEO Jeffrey Bewkes said spinning off all or part of the Web unit was one option. AOL's fate will certainly be a focus of Time Warner's earnings call Tuesday.

Michael Morris, an analyst at UBS AG believes AOL could be a separate company as soon as six months from now. "A very important piece of the investment thesis is the ability to excel in the cable-network and content businesses, and for the company to do that I think they need to spend less effort and energy on AOL," Morris said in a phone interview. AOL will be "the No. 1 most important thing on the call." Ed Adler, a spokesman for Time Warner, declined to comment on the timing or structure of a possible AOL separation.

Time Warner hired Tim Armstrong, who previously ran Google Inc.'s ad sales and operations teams in the Americas, to run AOL in March, a move that many saw as making a spinoff more likely. AOL's ad sales fell 18% in the fourth quarter, following a 6% decline in the third. Morris expects a 20% decline in the first quarter.

Read the whole story at Bloomberg News »

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