Time Warner has announced that it will spin off AOL, on the same day as reporting a big plunge in revenue in the troubled division.
Time Warner has made an initial filing with the Securities and Exchange Commission that it intends to spin off AOL, although notes that no final decision has been made. Time Warner said in a statement “Although the Company’s Board of Directors has not made any decision…the Company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions.”
Revenue at AOL dropped 23% in the first quarter of 2009, off the back of a 20% fall in advertising, and a 27% drop in its fading internet access business. Cost cutting did not match the decline, although AOL still managed to report a $150 million profit after before Depreciation and Amortization, a drop of 47% over the same quarter in 2008.
