Time Warner Mulling AOL Breakup, AOL Sales to Possibly Shrink
After to a recent interview with AOL CEO Jonathan Miller, the Sunday Telegraph, a UK newspaper, is reporting that media giant Time Warner is considering undoing the merger between Time Warner and AOL that occurred in 2000.
“It’s possible, going forward. It’s not a discussion that Time Warner has a problem with understanding or engaging in. Until we were on this present course, it wasn’t even the right discussion. Now it becomes more interesting.” If Time Warner lets AOL go though, Miller fears it will be quickly snapped up by a competitor.
AOL Europe, like AOL North America, is moving to a free ad-supported business model, and has been gradually selling off its Internet access units. Recently UK-based broadband provider Carphone Warehouse bought AOL UK for $688 million. AOL is committed to developing an ad-supported model in spite of the obvious short-term losses the company will incur in its sales division.
Miller also chatted with German publication Die Welt regarding a possible sales decrease for AOL with its new ad-supported initiatives. He was quoted as saying, “Sales may shrink for the next two years as it gives away services to win more users and attract advertising,” while adding, “In the past, we invested a lot of money in the infrastructure for the access business and in winning customers. That’s over now. Later, sales should rise again.”
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