Time Warner Dumps AOL

After a nine-year partnership with America Online (AOL), Time Warner, former parent company of Time Warner Cable, has officially dumped the Internet service provider. In hopes of building a successful, modernized media empire, Time Warner has left AOL to fend for itself.

Less than one decade ago, Time Warner purchased the failing ISP, expecting the union to strengthen both parties. Because of this transaction, Time Warner is now in a weaker position than when the partnership formed. The divorce of Time Warner and AOL has been long-awaited, but it was not made official until Thursday. America Online is now a separate entity, and will be managed by former Google Ad Executive, Tim Armstrong. His objective is to restore AOL to its former position, that of a powerful brand in the industry.

Though America Online has been overshadowed by Google, among other Internet frontrunners, Armstrong will try to build a far-reaching Web advertising network in addition to AOL's Websites, which continue to hold a strong presence online.

New York-based Time Warner currently owns 95% of America Online. The remaining 5% will be purchased from Google during the third quarter of 2009, upon which AOL - and its 7,000 employees - will become its own entity. AOL will become a publicly traded company by the end of 2009.

"For AOL, becoming a standalone company will give it more focus and strategic flexibility," Time Warner's Chief Executive Officer, Jeff Bewkes, stated at Time Warner's annual shareholder meeting Thursday in New York City.

With AOL out of the way, Time Warner will be able to better-improve its movies and cable TV networks, such as HBO and CNN, and print publications such as Sports Illustrated, People, and Time. Time Warner Cable's stock has risen approximately 26% since separating from Time Warner, while its former parent company's stock has remained static.