Time Warner to ditch AOL?

Submitted by Rollie Hawk on Sun, 2005-05-22 18:55.

Is Time Warner ready to ditch perennial loser AOL? The message is a mixed one thus far, which must have AOL apologists feeling a big shaky.

Four years ago, AOL was still a fairly hot commodity. So hot, in fact, that Time Warner was willing to shell out $124 billion for it. In the time since, the world's largest media company hasn't gotten around to paying dividends but announced on Friday that it will begin paying out regular quarterly dividends. Those dividends will total around $230 million per quarter.

While chief executive Richard D. Parsons considers this a sign of complete turnaround and proudly admits Time Warner has cut its debt by $11 billion since 2002, investors aren't drinking the punch. Maybe they aren't satisfied with the announcement of $230 million in dividends since it works out to only five cents per share.

This has led to speculation of an AOL spinoff that would result in a new initial public offering of AOL stock. According to Parsons, "If it gets to the point where consolidation is happening in the Internet, the possibility of an IPO is out there." It seems the plan is already in place but will not be used "at this point in time."


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Rollie Hawk is a consultant, web publisher, online personality, magazine writer, web developer, network administrator, teacher, husband and father residing in southern Illinois. He graduated in 2002 from Southern Illinois University, earning his BS majoring in math with a minor in chemistry.

Rollie is a certified math teacher with endorsements in chemistry, physics, and physical science and has taught students of all age groups and abilities, ranging from grade school to the university level. In addition to math and science, he has also taught GED, job skills, and alternative high school classes (his personal favorite).

After the birth of his daughter in 2004, Rollie decided to spend more time at home. This meant leaving his teaching position and devoting his working hours exclusively to consulting, web development, and general IT work.