• Bloomberg, Wednesday, April 1, 2009 9:15 AM

Time Warner Inc.'s spinoff of its cable division dropped it to third place among U.S. media companies, behind Walt Disney Co. and News Corp. Here's the breakdown: Disney reported fiscal 2008 sales of $37.8 billion. Rupert Murdoch's News Corp. had $33 billion in sales. Excluding $17.2 billion in cable revenue, Time Warner's 2008 sales totaled $29.8 billion.

"Investors want to buy large market names. It's better to be Disney than a company that's a third of the size, like Viacom," says Michael Nathanson, Sanford C. Bernstein analyst. He rates Disney, News Corp. and Time Warner shares "market perform."

The Time Warner split reflects a shift in strategy, says a company rep. "Time Warner now is a focused content company with the scale and know-how to make it possible for us to capitalize on emerging distribution platforms," he says. Time Warner divested the second-largest cable company in the U.S. because it no longer needed the division to guarantee distribution of its channels, including HBO and CNN.

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