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November 18, 2009

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Time Warner releases date for AOL's spin-off

TIME Warner will spin off its Internet business, AOL Inc, as a separate company on December 9.

On that date, Time Warner shareholders of record as of November 27 will receive one share of AOL common stock for every 11 shares of Time Warner common stock they hold, the media company said in San Francisco on Monday.

AOL said in a regulatory filing it would start out with about 105.7 million common shares, based on the amount of shares of Time Warner stock it expects to be outstanding as of November 27.

Based on Time Warner's closing stock price of US$32.35 on Monday, AOL is worth about US$3.4 billion.

That is a fraction of the US$20 billion that longtime advertising partner Google Inc valued it at in 2005 when it bought a 5 percent stake in the firm for US$1 billion.

It is also much lower than what Time Warner valued AOL at in July when it bought back Google's investment for US$283 million.

This signified AOL was worth less than US$5.66 billion when excluding an unspecified cash distribution included in the total price.

The media conglomerate said in May that it planned to spin off the business by the end of the year after years of trying unsuccessfully to integrate the two companies.

AOL's Internet access business has long been fading, while efforts to derive more revenue from online advertising have met difficulties.


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