Welcome to Web 3.0. Time Warner confirmed this morning it is separating from its laggard Web unit AOL. The company said in a statement that the board had authorized a complete legal and structural separation from the business.
AOL's $182 billion purchase of Time Warner back in January 2001 was been widely viewed as one of the worst in corporate history, though in recent years Time Warner has worked hard to find a partner help maximize the value of the asset. The recession ended that process as online advertising revenue cratered at the firm.
AOL, still a major global force on the Web with 107 million domestic unique visitors, recently appointed Google's head advertising executive, Tim Armstrong, as CEO after Randy Falco's exit.
Time Warner chairman and CEO Jeff Bewkes said, "We believe that a separation will be the best outcome for both Time Warner and AOL. The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses." Bewkes said the separation would enable Time Warner greater operational and strategic flexibility.
"This will be a great opportunity for AOL, our employees and our partners," Armstrong said in the statement this morning. "We play in a very competitive landscape and will be using our new status to retain and attract top talent."
Time Warner owns 95% of the company, while Google holds the remaining 5%. Time Warner is expected to purchase Google's stake in the third quarter this year.
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below