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Earnings: TW’s Parsons Downplays AOL Sale Chatter, Talks Up Ad Sale Gains

During the 3Q earnings call, Time Warner CEO Dick Parsons and COO Jeff Bewkes each tried to dampen speculation that AOL is for sale. Parsons called AOL “a core asset” for Time Warner, adding that Time Warner expected AOL to increase advertising revenue at or better than industry levels next year. He declined to be more specific since estimates for online sales growth vary widely. Still, Bewkes quickly pointed out that `”we always evaluate any alternatives that are more profitable in the long run.”
Fortune recently reported that Yahoo had approached Time Warner about a possible sale while AOL CEO Jonathan Miller recently told the U.K’s Telegraph that a sale is “not a discussion that Time Warner has a problem with understanding or engaging.”
Both Parsons and Bewkes said they were pleased with the efforts AOL was making to change itself from a subscription to an advertising-supported business. Parsons: “We are signing up more users than we expected. … AOL is on track to grow usage, meaning page views starting next year. AOL continues to monetize its audience very effectively.”
Asked about TW’s overall online strategy, he said the divisions each have to have their own strategies and that AOL can “sometimes be a partner.”
“We’ve got an extremely engaged user base and we see that holding up,” said Bewkes. He added that Time Warner was on track to cut “at least” $1 billion in costs from AOL by 2007 and “at the rate we are going, we will do better than that.”
AOL ended the quarter with 3 million “free” registered users, including one million who registered following the switch.
In other matters, Parsons said there was an “awful lot of interest” in the magazine titles that Time Warner has put up for sale. He also said the triple play marketing of services at Time Warner Cable was very effective. Bewkes described the cable scatter advertising market as “about mid-to-high single digits above the upfront markets.”