Time Warner confident to be online media giant
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September 19, 2006 Tuesday 2:48 PM EST
By Paul R. La Monica, CNNMoney.com editor at large
From Lexis Nexis
Time Warner chief operating officer Jeffrey Bewkes said Tuesday he was confident that the media giant would be a leader in online media, even though the turnaround at the company's struggling AOL unit is just beginning.
Bewkes touted the growth potential for the Web sites of Time Warner-owned properties such as People, Sports Illustrated and CNN.
"Big brands really matter on the Web," he said. Bewkes made his remarks at the Goldman Sachs Communacopia XV conference in New York.
As for AOL, Bewkes said that so far, the decision to stop charging AOL broadband
subscribers access fees in August has led to increased usage of AOL services.
"People weren't leaving AOL because they didn't like it. People left because they wanted to go to broadband and were being penalized for it," Bewkes said.
AOL CEO Jonathan Miller made similar comments about AOL's new strategy at a Merrill Lynch media conference last week.
Time Warner is hoping that AOL will now be able to take greater advantage of the booming market for online advertising.
To that end, Bewkes said that he was "happy" with the online ad sales growth at AOL in the third quarter.
He also expressed confidence about the performance of the company's cable systems and cable network units.
Still, shares of Time Warner have underperformed the stocks of media rivals CBS, News Corp. and Walt Disney as well as cable company Comcast this year.
Wall Street has been concerned about the steady decline in sales and operating profits at AOL as well as the sluggish performance in Time Warner's magazine and movie studio businesses.
Shares of Time Warner, the parent company of CNNMoney.com, rose less than 1 percent during morning trade on the New York Stock Exchange.