Many said that the union of AOL and Time Warner (new and traditional media) would not prove to be a lasting one. Lo and behold, nearly a decade after the merger of the two companies Time Warner finally called it quits. Time Warner lets go of America Online to focus on their traditional business in the movie, TV and publishing industries.
AOL now remains to be in a very volatile situation. Without the backing of Time Warner, it now relies on its still-large but now-obsolete dial-up Internet access and its stale Internet advertising arm. The task of getting AOL back on track now falls on current CEO and former Google executive Tim Armstrong.
Time Warner owns 95 percent of AOL and will buy out Google’s 5 percent stake during the third quarter for an undisclosed amount. From there, AOL and its 7,000 employees will be spun off into a separate publicly traded company around the end of the year.
While still the largest dial-up provider, AOL saw its subscriptions fall from a peak of 26.7 million in 2002 to just 6.3 million last year. It served as an online medium for promotion of Warner movies but never really generated revenue.
Source: Business Week
Related posts:
Tags: AOL, Internet, Media, Technology, Time Warner