| Yes and no. AOL was bought more for the media aspects of it at the time than to be a companion for the cable division. So in a way it was bought by the exec at Time Warner not Time Warner Cable (a different division). Also, note that Time Warner Cable is about to be spun off of Time Warner into its own company. |
EPS
join:2008-02-13
Hingham, MA | Yes and no.
America Online, Inc., the country's largest ISP, acquired Time Warner Inc., primarily for its media properties, and renamed itself AOL Time Warner. In the merger, AOL also got control of Time Warner Cable, but restrictions were put in place (including allowing Earthlink to act as ISP) to prevent AOL from dominating broadband like it did dial-up. However, AOL shareholders owned 55% of the new company.
As it turned out, AOL's stock was greatly inflated due to the dot-com boom, and the company's value collapsed. The old Time Warner (inc. its cable arm, but also Warner Bros., Time Inc., etc.) became the most relevant part of the company, and later AOL was dropped from the name.
Now, the remnants of AOL, which never recovered, are a huge weight on Time Warner, which is trying to sell them off. As you stated, they're also spinning off TWC, in an effort to make the company simpler. (the argument being that Time Warner is too complicated and confuses investors) |
