The Internet service's plunging revenue has been dragging down the media company that it acquired in 2000. In 2000, America Online Inc. used its soaring stock price to gobble up Time Warner Inc. and create the world's largest media conglomerate. Nearly a decade later, it's Time Warner that's spitting out AOL.
Time Warner said in a regulatory filing Wednesday that it intended to spin off the struggling Internet property, whose advertising revenue plunged 20% in the first quarter.
AOL's decline contributed to falling sales and profit at Time Warner. The company's profit dropped 14% to $661 million, also hurt by shrinking revenue in its publishing and film segments and charges from the March spin-off of Time Warner Cable. Time Warner's revenue fell 7% to $6.95 billion.
Still, its shares rose 21 cents to $21.98.
The company didn't say when it planned to let go of AOL, which recently ousted Chief Executive Randy Falco and replaced him with Google Inc. advertising executive Tim Armstrong.
AOL continues to be the fourth-highest trafficked Web property in the U.S., behind those of Google, Yahoo Inc. and Microsoft Corp., having drawn more than 104 million unique visitors in March, according to Web ratings service ComScore.
Although that was a 7% decrease from a year earlier, AOL still has enough traffic to be competitive, said Thomas Egan of Collins Stewart, a financial advisory group. “It's really the monetization of it that has been disappointing."
AOL has overhauled its business, trying to replace dwindling revenue from its dial-up Internet service with revenue from Web ads. But it has struggled to keep pace with competitors.
Time Warner said in a regulatory filing Wednesday that it intended to spin off the struggling Internet property, whose advertising revenue plunged 20% in the first quarter.
AOL's decline contributed to falling sales and profit at Time Warner. The company's profit dropped 14% to $661 million, also hurt by shrinking revenue in its publishing and film segments and charges from the March spin-off of Time Warner Cable. Time Warner's revenue fell 7% to $6.95 billion.
Still, its shares rose 21 cents to $21.98.
The company didn't say when it planned to let go of AOL, which recently ousted Chief Executive Randy Falco and replaced him with Google Inc. advertising executive Tim Armstrong.
AOL continues to be the fourth-highest trafficked Web property in the U.S., behind those of Google, Yahoo Inc. and Microsoft Corp., having drawn more than 104 million unique visitors in March, according to Web ratings service ComScore.
Although that was a 7% decrease from a year earlier, AOL still has enough traffic to be competitive, said Thomas Egan of Collins Stewart, a financial advisory group. “It's really the monetization of it that has been disappointing."
AOL has overhauled its business, trying to replace dwindling revenue from its dial-up Internet service with revenue from Web ads. But it has struggled to keep pace with competitors.
