Media and entertainment giant Time Warner said today that it was in talks with other companies over its AOL Internet division as it unveiled a surge in profits and a bigger share buyback programme.
Time Warner, the parent company of movie studio Warner Bros and cable television networks CNN and HBO, said the better third-quarter
performance was led by contributions from AOL and its Time magazine division.
Activist shareholders led by billionaire financier Carl Icahn, angry at a crash in Time Warner's market value since its disastrous merger with America OnLine five years ago, have been pushing for changes at the sprawling group.
Time Warner's share price has plummeted about 75% since January 2000, when AOL announced it was taking over the media conglomerate in an audacious marriage of the old and new economies. The deal quickly turned sour as the benefits promised to shareholders failed to materialise.
AOL founder Steve Case stepped down from Time Warner's board on Monday, in another symbolic retreat for the mega-merger after the AOL name was dropped from the group's title in 2003. Icahn wants the speedy sale of Time Warner's profitable cable TV unit and the repurchase of $20 billion in stock.
Group chief executive Dick Parsons went some way to meeting Icahn's demands, announcing the board had authorised a $7.5 billion increase in the stock repurchase programme to $12.5 billion over the next 21 months.
Riding a 6% revenue jump on growth in its cable TV, networks, filmed entertainment and publishing units, Time Warner said its quarterly net earnings rocketed 80% to $897m, beating Wall Street forecasts.
Time Warner's statement made no mention of the eventual fate of AOL, after reports said that Google, cable operator Comcast and Microsoft are all interesting in investing in the internet service provider's contents portal. But in a conference call with analysts, Parsons confirmed the company was 'engaged in a series of exploratory discussions involving AOL with a number of strategic partners, many of whom have been identified in the press coverage'.
