Monday July 27, 11:23 PM
Time Warner informs SEC of plan to spin off AOL
WASHINGTON (AFP) - US media and entertainment giant Time Warner Inc (NYSE: TWX - news) . informed the Securities and Exchange Commission (SEC) on Monday of its plan to spin off its troubled Internet unit AOL.
The formal notification is a first step ahead of the public listing of AOL, which fused with Time Warner in 2001 in what has been described as one of the most disastrous mergers in corporate history.
Time Warner did not say when the separation would take place and said it reserved the right to cancel the transaction.
Announcing plans in May to make AOL an independent publicly traded company, Time Warner had said that it hoped to do so before the end of the year.
Once the proposed separation is complete, Time Warner shareholders will own all of the outstanding interests in the Dulles, Virginia-based AOL, according to the plan.
An independent AOL would be free to focus on growing its Web brands and services and its advertising business, according to Time Warner.
AOL, formerly known as America Online, saw its heyday as a provider of dial-up service in the early days of the Internet but has been losing ground as consumers switch to high-speed or broadband services.
Time Warner merged with America Online in 2001 at the height of the dot-com boom, with AOL using its inflated stock as a currency for the transaction.
But the marriage of old and new media behemoths baptized as AOL Time Warner quickly went sour as benefits promised to shareholders failed to materialize.
AOL was valued at more than 150 billion dollars when the ill-fated merger was announced but its worth collapsed dramatically as the dot-com bubble burst.
Time Warner was forced in 2002 to massively write down the value of the Internet unit and the AOL name was removed from the group's corporate title in 2003.
AOL is currently the number four Web gateway after Google (NASDAQ: GOOG - news) , Microsoft (NASDAQ: MSFT - news) sites and Yahoo (NASDAQ: YHOO - news) ! and has been trying to refashion itself recently as a popular one-stop portal.
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