• Newsweek, Tuesday, October 30, 2007 9:45 AM

When news came last Friday that Time Warner CEO Dick Parsons could be succeeded by Jeff Bewkes as early as next week, the company's stock surged 3.5%. The media giant, whose share price has barely budged during Parsons' five-year tenure, has been in need of change for some time, or so goes the general consensus. Some speculators said the surge indicated that investors hoped Bewkes would break up the lumbering conglomerate, starting with AOL.

The company former known as America Online was supposed to be "the growth engine on which Time Warner staked its future in the Internet Age." Instead, the company quickly became an Internet Age dinosaur whose business model remained trapped in the long forgotten Dial-up Era. Indeed, an eventual overhaul of that model two years ago forced the company to dramatically redirect itself once again.

Either way, investors have made it clear that AOL, which always seems to arrive late to the party, should no longer be in the hands of old media.

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