Over a year and a half ago, it was a different story. Google, Comcast, and Microsoft were strongly considering buying AOL, which had enjoyed a resurgence and renewed worth, especially in the area of search traffic. At the time, some were suggesting Time Warner could have sold AOL for around $20 billion.

But now, some Wall Street analysts see less value for the online service because of mediocre business moves. UBS media analyst Michael Morris has revised his value down some $3 billion to $13 billion for AOL. The lower value reflects "a slower growth operating model and a more challenging environment," he wrote in a report.

The problem? AOL has not presented a clear strategy in the higher competitive Internet advertising market. Morris isn't alone.

Just a week before, another media analyst, Richard Greenfield of Pali Research, was much more critical: "AOL's new management team was clearly caught off guard by the developments at AOL in Q2, raising our concern about its ability to run/turn the business around (which is particularly important given the company's desire to maintain its current asset portfolio rather than break up the company)," he writes.

Those developments in the second quarter were about the continued advertising weakness of the business--which, he says, were followed by rumors of a "new massive round of layoffs."

Greenfield added that he had "simply lost faith/trust in Time Warner's executive management team and Board of Directors," and in particular with AOL.

For USB's Morris, this has meant a downgrade for Time Warner from a "buy" to a "neutral." Morris was also concerned about Time Warner Cable's future, especially in light of increased competition from phone communications companies Verizon and AT&T.

Greenfield is more direct, believing that that AOL should be quickly sold--either as a whole company or in pieces--to give Time Warner the maximum value.

This news story is important. I recommend that everyone read it.