According to Time Warner, content and distribution don't mix. There is no synergy and no gain to try to build out a vertical business that both creates content and distributes on a cable or web platform. First came the separation of the cable business from networks and studios and in a few weeks the web. On December 9, AOL will no longer be a Time Warner company. "AOL common stock will begin trading on the New York Stock Exchange Dec. 10 under the symbol 'AOL.' On Dec. 9, Time Warner shareholders of record as of Nov. 27 will receive one share of AOL stock for every 11 shares of Time Warner stock they own."
It was AOL that many years ago actually purchased Time Warner. But the parent soon became the child and now the orphan to the business. As broadband overtake dial up, AOL lost subscribers. It switched from pay to free and built up unique branded content to keep users engaged with their site. But it could never reach its former profitable glory and Time Warner saw AOL as its albatross.
To be fair, Time Warner didn't do much to engage AOL either. At the time it was purchased, it had its own broadband service, Roadrunner. Rather than combine the entities, it allowed them to compete with each other with its own customer base. AOL lost then and AOL lost now.
For stockholders of AOL, the question will be whether to hold onto these new shares or trade them while they still have value. Can AOL survive as a standalone entity? For Time Warner, the answer may simply be, "who cares."