After laying off approximately 10% of AOL employees at Time Warner, they announced a loss of $16 billion. Unfortunately, Time Warner’s divisions of filmed entertainment, AOL, and publishing revenues dropped three percent from a year ago. These were partially offset however from a slight gain in its cable and networks businesses. CEO Jeff Bewkes made a proper statement of the company by saying, “we'll strengthen our balance sheet, improve our strategic flexibility and return capital to our stockholders on a consistent basis. Through these steps, we expect to emerge from this downturn in an even stronger competitive position." Reasoning for improvement within the cable division was mainly because of CNN political spending and Major League Baseball on TBS which is of course owned by Time Warner. Overall, sports is helping Time Warner because the NBA which is also played on TBS. The main loss can be blamed for the AOL division which was dropped by 20%. Because of 2008 writeoffs mainly dealing with AOL, the hole that they have dug themselves in can be to blame. It is however good to see a positive outlook from the CEO in a time like this and to understand the downgrade but to look at it in a positive sense.
Holmes, Robert. "Time Warner Posts $16 billion Loss." February 4, 2009.
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I just read about what's going on with AOL. It will be interesting to see what happens. Apparently, they are getting rid of their subscription and changing it to a free to all web portal. Obviously this makes a lot of sense since other web portals are free. AOL is switching to a reliance on advertisement money to function. Hopefully they can get their act together. Personally I think it's a smart move on AOL's part especially because people are cutting back their spending right now. Now they just need to convince people they are modernizing their business and come back to them. AOL is a very recognizable brand name so it shouldn't be too difficult to do. Do you think that AOL's connection to Time Warner will help them make a comeback in this respect?
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