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Is Time Warner finally going to unload AOL?

It's been one of digital media's foremost will-it-or-won't-it-happen stories. But with a new CEO and Time Warner execs seeking to remove debt from the division, this could actually happen.

There's been chatter on the Web (and Wall Street) for years now about whether Time Warner should spin off its AOL subsidiary. Now, according to a report in The Wall Street Journal, it looks as though Time Warner's management is looking to tweak the requirements that prevent it from unloading AOL. So it finally might happen.

On the other hand, AOL's slow drift away from its parent company has been at about the speed of plate tectonics; these "fresh start for AOL" moves are nothing new. It was way back in 2003 that Time Warner reverted to its old name from AOL Time Warner, changing its stock symbol back to TWX from AOL. The company relocated its corporate headquarters to New York in 2007, conspicuously not moving into Time Warner's own headquarters.

AOL has also been aligning itself into three quasi-standalone businesses: advertising (Platform-A, amassed out of a number of digital-ad acquisitions), social networking (the "People Networks" division anchored by AOL's $850 million acquisition of Bebo), and content (the "MediaGlow" network of blogs and editorial sites).

But it wasn't until the second half of last year, particularly amid the Microsoft-Yahoo acquisition fiasco (in which AOL was highlighted as an acquisition target for both companies) that AOL's post-Time Warner fate started to look more evident. CEO Jeffrey Bewkes confirmed in August that the AOL dial-up access division would be spun off in a further attempt to focus on advertising. It's been almost a year, for that matter, since Time Warner announced that it would be spinning off its Time Warner Cable division. So it's not like the company doesn't have a recent track record of slimming down.

Now, with former Google advertising executive Tim Armstrong about to assume the CEO role, AOL could indeed be shaping up to spin off for good.

The latest move, detailed in the Journal, would relieve AOL of $12.3 billion worth of debt, effectively lifting a weight from the business and enabling it to move off on its own. Bondholders have until the end of the day on April 15 to provide consent. An analyst told the WSJ that an initial public offering is unlikely--ad revenues are still falling, and the overall market climate is obviously not ideal.

But as we've seen, these things just don't happen overnight.