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Did Carl Icahn give up too soon where Time Warner is concerned? Using the stock price is the prevailing measure, the answer could be yes, or so says WSJ’s “Heard On The Street.” TWX shares are down 10 percent, while other high-profile media companies have seen share increases of up to 20 percent. The market cap at close Friday was $71.1 billion; the stock price closed at $16.97. The result: Time Warner is “as vulnerable as ever to an attack by hedge funds or private-equity firms, investors say.” One of those investors is Mark Greenberg, a fund manager for shareholder AIM Investment, who told WSJ: “For the right price, I’d be interested in a breakup.”
The worry beads are out for Warner Bros., Time Inc. print, and the usual suspect, AOL. If the latter can show success, that could halt at least some of the grumbling.
AOL: But Pali Research analyst Richard Greenfield sent out a note Friday saying his excitement over AOL’s changes is waning. “We are increasingly concerned that AOL lacks clear meaning/purpose to the average Internet user,” he wrote. He suggested that AIM’s user base may be at risk from social network challengers and because it’s a feature-heavy piece of software. He also argues that AOL Video doesn’t have enough brand presence for web users. After running through a list of AOL’s recent initiatives, he added: “… our core problem is simply: what is AOL’s core message? It almost feels like AOL is brainstorming and throwing everything they can think of out at consumers, with the hope that enough sticks that they can survive – with a clear message/value proposition missing.
— He expects AOL to lose 3-million plus subscribers in 2006.
Bottom line: The future of TW is still the gift that keeps on giving for business journalists and analysts. If anyone responds to the trial balloons, look for another round of headlines on a possible split-up of Time Warner but no real challenge to the status quo. At least for now.