Where's this roller coaster going?

Time Warner's broadband businesses are going up, down, and all around.

Here's my issue with Time Warner: How the heck to you judge whether it's broadband businesses are on the right track?

First there's Time Warner Cable, which runs a broadband ISP called Road Runner. The service added 127,000 new customers last quarter for a total of 3.5 million. That still makes Road Runner the second largest cable broadband ISP after Comcast. But take a closer look. Last quarter's gains were less than the 170,00 added during Q2 last year and the 193,000 added during the previous quarter.

Then there's AOL. The media giant's black sheep is finally turning the corner on its advertising business while its dial-up subscribers continue to decline. This quarter alone, AOL lost 1.3 million dial-up customers, marking its greatest single-quarter in recent memory.

But there's a glimmer of hope. Its "bring your own access" subscribers grew by 630,000, giving more evidence that its defensive maneuver might be working. AOL wants dial-up subscribers switching to the Comcasts and Verizons of the world to maintain accounts using AOL for Broadband.

So on one hand, cable is starting to plateau. That could be a problem because it's fighting tooth-and-nail against DSL services offered by the Bells (who, by the way, are chugging along at a faster rate than Road Runner). But you can't overlook AOL's gains, especially in a highly profitable business such as BYOA, since it doesn't have to maintain an access network.

I know there are plenty of people smarter I am that can build spread sheets to value Time Warner's broadband business (I hate using the word "value" but I can't think of a more appropriate verb). I'll leave it to them to figure out whether the times are a changin'.

 

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