• by Wayne Friedman , Laurie Sullivan  @lauriesullivan, February 5, 2009

A massive writedown of its media assets forced Time Warner deeply in the red, landing the company with a $16 billion net loss for its fourth-quarter financial results. At the same time, the company announced a round of major layoffs.

The writedown of its assets amounted to $24.2 billion. A year ago, the company had a much brighter period--earning a $1.03 billion profit. The stock market, anticipating the news, offered a shrug, down just 1% to $9.70 in midday trading. Time Warner's revenue slipped as well--down 3%--to $12.31 billion.

Continuing problems are hitting Time Warner's AOL division. Revenue was down 23% to $968 million, subscription revenue fell 27%, and ad sales sank 18%.

Time Warner said Wednesday that it received a request from Google seeking to exercise its "demand registration statement" on its three-year-old, 5% stake in AOL. Speaking on a conference call with analysts, Time Warner CFO John Martin said the company's options are to take AOL public, buy back the stake, or delay a decision.

Google bought the AOL stake from Time Warner in 2005, and the unit is now worth $5.5 billion. "They are looking to monetize the service in some way," said Thomas Eagan, Collins Stewart analyst. Google also has an agreement to provide search services to AOL in a separate deal, but it is unclear when the deal is up whether they will return to Google or look for services through Microsoft or Yahoo.

The bulk of Time Warner's job cuts come from AOL, which will lose 700 jobs--about 10% of the workforce--due to the slowing advertising market. Separately, Time Warner Cable announced it would lay off 1,250 people in the coming weeks, hoping to save $90 million a year.

Time Warner Cable revenue rose 8% to $4.4 billion, while filmed entertainment revenue sank 11% to $3.1 billion.