Time Warner is working on splitting AOL's audience and access businesses and running the two as independent entities, Chief Executive Jeffrey Bewkes said on Wednesday.
"This should significantly increase
Time Warner forecast on Wednesday profit growth to slow but possibly exceed analyst estimates in 2008 after reporting quarterly earnings that reflected increases in broadband and phone subscribers and sales of home videos.
The company said fourth-quarter profit fell to $1 billion, or 28 cents per share, from $1.8 billion, or 44 cents per share, a year earlier when it logged a big gain from sales of
AOL's revenue fell 32 percent, dragged down by a loss of 740,000 subscribers and offsetting a 13 percent rise in film division revenue.
Adjusted operating profit at AOL rose 29 percent, while online advertising growth, a closely watched barometer of progress for the division's restructuring, rose 10 percent.
The company expects AOL's advertising revenue for the first quarter of 2008 to be "essentially flat to down slightly" versus the year-earlier quarter, Chief Financial Officer John Martin said.
Martin said AOL's "costs will continue to be reduced and advertising should continue to grow" starting in the second quarter of 2008.
"The results of all this is that we continue to expect AOL to maintain its overall profitability on a considerable scale," Martin said.
AOL's fiscal 2008 adjusted operating income before depreciation and amortization was likely to approach fiscal 2007 levels, the company said.
AOL's access business is its dial-up Internet service, while audience is its portal and advertising business.
Martin said it will take "several more months" to separate the AOL businesses "because it's fairly complicated."
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