• by April 13, 2004

The Minute is spun frequently.

The Minute hates to be spun.

So we flail around, disentangle, rewind, and take a shower to wipe off all the dreck that accumulates each day.

America Online tried to convince me that its ad sales operation is different now and that its go-to-market strategy is morphing into a traditional media model from the standpoint of media sales, content, and programming. That the company is striving for this model, I have no doubt. That the company will achieve this model, I cannot say. Does it matter? Well, yes it does, if AOL is to retain value and credibility, maintain advertiser trust and enough shine to make it an attractive, saleable property.

Meanwhile, the distractions continue to mount.

Today came news via The Washington Post, that the Securities and Exchange Commission now has enough evidence to recommend prosecution if Time Warner doesn't agree to settle the allegations before it. The SEC alleges that AOL improperly booked $400 million of ad revenue.

Interestingly, the SEC investigation came up yesterday while I was lunching with a source. The source suggested that the investigation was all but over and that Time Warner will settle quickly in order to move toward the spinoff of AOL. Nothing can happen until the investigations are put to bed.

So the source and I made an interesting wager.

I put my McLaughlin Group hat on and asked said source to predict when America Online will be spun off. A rough timeline was offered:

A Time Warner Cable spinoff will come first, (by early summer), followed by rumblings of a spinoff for AOL. By fall, we'll be drowning in the cacophony of spinoff. Then over half-eaten plates of salmon and spinach salad we wagered a lunch, that by April 12, 2005, the spinoff or acquisition of AOL will be a done deal.

AOL has positioned itself, of late, as a content machine and a province of programming. It has to do this because it missed the broadband boat and is no longer about access. The division is preening and buffing and spinning.

As for a Time Warner Cable spinoff: TWC had been expected to separate from the Time Warner kingdom last spring, but that was before the AOL investigations hit. Having raised some cash from the sale of Time Warner Music, it may not be necessary to spin off Cable.

Either way, I bet I win a lunch next April 12.