The End is Finally Near
Remember back in 2000, when AOL’s acquisition of Time Warner (NYSE:TWX) seemed like the perfect fit – content provider extraordinaire meets massive online distributor. Remember when dial-up access to the internet seemed like a luxury? The good old days when this was, on the surface, supposed to be the tag-team duo that couldn’t be beat. When all was said and done, and the ink was dry, AOL had purchased the much larger Time Warner for a whopping $164 billion. A match made in heaven. And the Divorce…
Nine years later and it was the marriage that never was. Mixed management, bad supervision, culture clashing -- you name it. The two companies have wanted a spin-off for years. Google (Nasdaq:GOOG), who bought 5% of share of AOL in 2006 (for about $1 billion), recently announced it would sell its shares back to Time Warner. The sum? A measly $283 million, representing a decrease of over 70% in value over barely three years.
The buyback sets the stage for an AOL spin-off that was announced this past May and is expected to occur later this year.
Maybe the two companies can find solace in this gem of a quote by Ashton Kutcher:
“I hope Demi, Bruce and I can help other divorced people”.
Good luck AOL & Time Warner, and remember, if you need him, Ashton will be there.