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AOL, once a leader in the online industry, may soon be swallowed by an online suitor

AOL, which was known it is younger days as a widespread internet service provider and search engine leader, and its waning days as a widespread saucer provider, now is looking to make some final preparations which may further lead it down the road to its ultimate demise.

Time Warner, the current owner of AOL has always been slightly wary of its struggling investment, and facing problems of its own.  New Time Warner Chief Executive Jeff Bewkes, who just assumed his position after succeeding Richard Parsons, announced that he has some big changes planned for AOL.

One of these changes is to split AOL's dwindling Internet-access/service business from its Web-portal and advertising sectors.  The move serves a two fold purpose for Time Warner.

The first advantage of the move is the company can carry out its goal of distancing itself from the cable internet and television business.  Time Warner currently owns a 84% stake in Time Warner Cable which is, despite being the shared name, a separate company.  The company is looking to make "changes" to its interest in TW Cable, but would not disclose what exactly it would be doing and spoke in broad terms.  Analysts predict, though, that they may sell much of their interest, dropping to 50% or less interest.   Meanwhile by splitting of AOL Internet-access, Time Warner can prepare to sell of this business section to another provider company, like Comcast.

Secondarily the split will allow Time Warner to possibly sell of AOL's Web-portal, which includes a search engine and various media to its online competitors.  The Microsoft-Yahoo merger would be disappointing to Time Warner as it would make a sale to either unlikely.  Also, Warner is wary of selling its property to Google Inc. as a major justification for a sale it alleges is to keep AOL competitive with Google.  That doesn't leave many likely candidates to buy the broken remains of AOL, but Mr. Bewkes commented that AOL is "open to any strategic moves that make sense."  However he seemingly contradictorily tried to assure that AOL would be able to remain competitive even if a deal wasn't reached, despite a 70 percent drop in fourth-quarter operating income.

As AOL prepares to be divided and sold off, a new chapter begins in the twilight hour of a former internet superpower.




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