Copyright 2008 Landmark Communications, Inc.
All Rights Reserved
The Virginian-Pilot
Feb. 7, 2008

NEW YORK – Time Warner Inc.'s new CEO laid out his vision for changes at the media conglomerate Wednesday, including dividing AOL's online access and advertising businesses and possibly spinning off the rest of the company's cable division.

Investors have looked to Jeff Bewkes, who took over in January, to restructure the company in hopes of reviving shares that have slumped 29 percent over the past 12 months.

Investors liked what they heard. Shares rose 31 cents, or 2 percent, to $15.71.

Bewkes was speaking with analysts about the company's fourth-quarter earnings (story here), which fell 41 percent after a big gain last year from the sale of AOL's European online access business.

Time Warner also said it expected growth to slow this year to a range of 7 to 9 percent.

Time Warner owns 84 percent of Time Warner Cable and may now have more options for spinning off the division tax free. However it's not clear that a complete spin-off will happen, particularly given a recent sell-off that has hurt the value of all cable stocks.

A spin-off or sale of AOL, should it occur, would mark a sea change from 2000, when Time Warner agreed to be purchased by the Internet company then known as America Online at the top of the dot-com bubble.

The deal turned out to be disastrous, leading to massive write-downs and settlements with shareholders and regulators over accounting improprieties.

Time Warner's cable division is the largest part of Time Warner, where many of the other assets are focused on video entertainment, including Warner Bros., New Line Cinema and a group of cable networks including HBO, CNN and TBS. Time Warner also owns Time Inc.

Time Warner reported net income of $1.03 billion, or 28 cents per share, versus $1.75 billion, or 44 cents per share, a year ago. Without one-time items, profit was in line with analysts' estimates.

Revenues rose 2 percent to $12.64 billion; analysts expected $12.65 billion.

More Broadband Direct:

• Time Warner plans to divide up AOL 

• Cisco gear powers Videotron 50 Mbps tier; Cisco Q2 profit up 

• Motorola products bridge WiMAX, Wi-Fi, Ethernet, 3G 

• CMC, SES Americom ink transponder deal 

• CTAM report: Early adopters prefer TV service from cable ops 

• Sunrise Telecom’s broadband cable sales decrease in Q4 

• Cable Center lines up speakers for spring 

• Broadband Briefs for 2/07/08