Time Warner Confirms AOL Separation Plans

NEW YORK: Time Warner’s board of directors today authorized the long-expected spin-off of AOL into an independent, publicly traded company.

"We believe that a separation will be the best outcome for both Time Warner and AOL," said Jeff Bewkes, the chairman and CEO of Time Warner. "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. The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”

The proposed transaction, undoing what is considered one of the most ill-fated mergers in corporate history, is expected to be complete by year end. AOL will operate as a standalone company, focused on expanding its reach, which today stands at more than 107 million U.S. unique visitors a month, and increased ad revenues. "Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options," said Tim Armstrong, AOL’s chairman and CEO. "We play in a very competitive landscape and will be using our new status to retain and attract top talent. Although we have a tremendous amount of work to do, we have a global brand, a committed team of people, and a passion for the future of the Web.”

Time Warner currently owns 95 percent of AOL, with balance 5 percent held by Google. As part of a prior arrangement, Time Warner expects to purchase Google’s stake in the third quarter of 2009, before embarking on the separation.