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Time Warner consider selling off AOL

Time Warner consider selling off AOL

Stock analysts were sharpening their pencils this week after word came that Time Warner would consider spinning-off America Online in the future to help finance new acquisitions. The media conglomerate's CEO Richard Parsons told investors at its annual shareholders' meeting in New York City that the company had discussed options of setting an initial public offering for AOL, but so far have not moved forward with any such plans. "If we get to the point where consolidation is happening in the Internet space, the possibility of an IPO is out there," Parsons told shareholders. Time Warner discussed with AOL management the possibility of selling shares of the online unit in an initial public offering, but decided to hold off "at this point," Parsons said. AOL purchased Time Warner in January 2001 for $112 billion, during what is now considered the height of the dotcom bubble. However, the move proved to be a costly one as the bust of the Internet strained the fiscal relationship of the two divisions. The purchase led to record losses and caused shares to nose dive. In 2002, less than a full year after the purchase, the company recorded a $99.7 billion loss. And to make matters worse in the strained relationship, Time Warner was forced to pay $510 million in criminal and civil fines to settle a federal fraud case stemming from allegedly shady advertising deals within America Online. The government accused AOL of parsing out money to smaller Internet companies who in turn purchased ad space with AOL. The scheme was allegedly devised to make the company appear healthier financially, and enable the organisation to exaggerate its growth. AOL Spokesman Nicholas Graham referred internetnews.com to Time Warner for comment. Time Warner did not return a request for comment. UKFast is not responsible for the content of external Internet sites.

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