• Fortune, Tuesday, January 24, 2006 10:16 AM

While Dick Parsons continues to defend his position at the head of the world's largest media company, Carl Icahn, whose firm owns just 3 percent of Time Warner, is brewing a plan that would see AOL and select Time Warner entertainment properties spun off and merged with another Internet media company--possibly Barry Diller's InterActive Corp., according to a Fortune report. Icahn has been confirmed to be in talks with Barry Diller about a partnership of some kind, but as the article points out, it would be nearly impossible for Icahn and IAC to wrestle those businesses out of Time Warner, which is some nine times bigger than the Internet company. Diller himself has said the talks are in very preliminary stages. At this point, it doesn't look likely that Icahn will prevail in the coming proxy battle between his new board of directors (which would probably include restructuring experts--not media types) and Time Warner's current board, but he is certainly stirring up enough trouble. And yet, despite the media's coverage of the great battle, and all the worldwide interest in it, Time Warner's stock still has yet to budge. However, as Icahn, who's made his fortune as a corporate raider, reminds us, "It took me four years, but ultimately I made $4 billion with RJR." That took four years. This has been 6 months.

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