Time Warner or Time Waffler?

Here we go again! Time Warner rethinking what it should do with itself! How about selling the cable business? No, let’s buy an Internet company?

If you are looking for final proof that things are getting irrationally exuberant, then all you have to do is read today’s Wall Street Journal, that reports that Time Warner is thinking about buying an Internet company. Just like in 2000 when they bought AOL (or was it the other way around) and things went downhill pretty fast, from that point on.

The Journal reports that some in Time Warner want to get out of the $11.8 billion a year cable business and may want to focus entirely on the content – be it movies, television, news, publishing or the Internet.

If they did go down this route it would be ironic, not to mention, shortsighted. The largest cable and broadband company in the U.S., Comcast, is going exactly the opposite way – adding content to its pipes. The Journal writes:

One argument in favor of getting out of cable is that it would free up resources for more investment in the Web.

Given Time Waffler’s track record, it would be akin to shooting themselves in the foot. The company has a lot of challenges – including fixing the publishing arm – which needs immediate attention.

A lot of this public musing is driven by the fact that Time Warner has an heir apparent, Jeff Bewkes, who is a content guy and will likely try and do something to announce his arrival, sometime next year. Current CEO Richard Parsons rightfully believes that cable gives TW a competitive advantage – not to mention, a hedge against those bad movie decisions Hollywood-types tend to make every so often.

Subscriptions, as someone once told me, keep shareholders happy.

Read: The Wall Street Journal. (subscription required)

Disclosure: I used to work for Time Warner, which owns Business 2.0. I currently write a column for the magazine.