Time Warner Begins Death by 1,000 Cuts

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The giant Time Warner implosion starts now with the move to split off its growing cable division and use the capital to buy back shares. While the cable business brought some stability to Time Warner’s bottom line, it’s an awkward asset for a content company to hold onto, especially if the content side of the business is thinking about divestitures. And so it begins.

The nation’s second-largest cable operator will be the first to go. CEO Jeff Bewkes said today that Time Warner would split off the remaining 84 percent of its cable division with details to be worked out later. Then we’ll look for a spin out or sale of the diminishing AOL access line business, which Time Warner plans to separate from the flailing Platform A advertising business.

The logical next step is a retreat from the publishing world with magazines such as Fortune, People and Time going on the block. What will be left are the movie businesses, including Warner Bros. and New Line Cinema, and cable TV properties such as HBO and TBS. Those units brought in sales of $5.5 billion during the quarter but are under continued pressure from the Internet. Like an aging matron, Time Warner appears to be taking refuge in the arms of old Hollywood.

10 Comments

Desmond Haynes, Jr.

“flailing Platform A advertising business”? Come on, don’t shoot just coz you have to! Give the company some time to get its act together in the ad space? How long did it take google to get Adsense going completely well?

AOL has TW legacy and bosses to please. Pity the 2001 merger even happened!

AOL is in the right track. Just give them time. And with MicroHoo happening, it is a good opp for them to shape up too!

I, for one, would wait and watch.
-D
http://techwatch.reviewk.com/

Ken Leebow

Way back in 1997, I thought TW would “own” the Internet. If you look at its site: http://www.pathfinder.com (at one time it was operational), you’ll see TW has a lot of content. Unfortunately, it never parlayed it into an Internet powerhouse.

I guess this proves that content is not necessarily King.

Joe

Don’t understand why “the logical next step” is to divest magazines (pure content biz with strong online presence). Big difference between that and access (cable/dialup).

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