Time Warner, AOL To Separate

Time Warner Inc. announced Thursday that its board has authorized plans for the complete separation of America Online Inc. from Time Warner.

Time Warner, which owns 95 percent of AOL, expects to purchase Google's 5 percent stake in AOL in the third quarter of 2009, according to a news release.

"The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses," Time Warner Chairman and Chief Executive Officer Jeff Bewkes said. "The separation will also provide both companies with greater operational and strategic flexibility."

After the proposed separation, AOL would become an independent, publicly traded company. AOL's Web brands and services reach more than 107 million domestic unique visitors a month. It will continue to operate its Internet access subscription services in the U.S.

“This will be a great opportunity for AOL, our employees and our partners," AOL Chairman and Chief Executive Officer Tim Armstrong said. "Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options. We play in a very competitive landscape and will be using our new status to retain and attract top talent.

"Although we have a tremendous amount of work to do, he said, "we have a global brand, a committed team of people, and a passion for the future of the Web."

Time Warner seeks to complete the proposed transaction around the end of the year.

AOL and Time Warner merged in 2001 in a deal worth $147 billion.