Time Warner to Spin Off AOL, Ending Ill-Fated Deal

Media giant Time Warner announced this morning what it had said it intended to do more than a year ago: Unload its struggling AOL advertising-and-dial-up unit, which will face life as a standalone, publicly traded company.

The move officially ends the nine-year saga of Dulles-based AOL and New York’s Time Warner, which began when AOL co-founder Steve Case engineered what was hailed at the time as the first of what would be several mega-marriages between old and new media.

Time Warner owns 95 percent of AOL, with Google holding the remaining share. Time Warner plans to purchase Google’s share of AOL in the third quarter of this year then spin off the company. It will be run by current chief executive Tim Armstrong, who came from Google in March.

The move was signaled as early as February of last year by Time Warner chief executive Jeffrey Bewkes.

“We believe that a separation will be the best outcome for both Time Warner and AOL,” Bewkes said in a statement. “The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”

Time Warner explored a number of options for AOL, including splitting it up and selling it off for parts. Other dial-up Internet businesses sniffed around AOL’s dial-up division, for instance. But in the end, and after hiring Armstrong to run AOL in March of this year, Time Warner felt a spin-off was the best option. It will be up to Armstrong if he wants to keep the dial-up business in AOL’s portfolio.

At the time of the 2001 merger, AOL’s stock was peaking at nearly than $100 per share, pushed skyward by the euphoria of the dot-com bubble. On paper, the merger seemed like a no-brainer: With 22 million subscribers, AOL would be the pipeline to distribute Time Warner’s world-class content, from its Warner Bros. movies to its Time Inc. publications to its WB television shows.

But things never worked out that way. In the pre-broadband Internet era, movies and TV shows were nearly impossible to watch via dial-up. Time Inc. was not Web-savvy; it had already tried and failed to create its own portal for its magazines. And the culture clash between the brash, deal-oriented AOLers and the established Time Warnerites was poisonous. One small example: Time Warner chafed at taking on the “@aol.com” suffix on their work e-mail address.

A procession of layoffs and executives streamed through Dulles as they tried to turn around AOL. They included longtime radio salesman Jimmy De Castro to Barry Diller acolyte Jonathan Miller to former long-time NBC sales chief Randy Falco.

Miller’s plan was radical: Turn AOL from a dial-up subscription company to an advertising-supported business. He allowed dial-up subscribers to shed by the millions and built out AOL’s Platform A advertising business. It worked, to a point. But not enough for Bewkes and the other Time Warner overlords. After four years, Miller was ousted in 2006 for Falco, who had been passed over for the top NBC job for Jeff Zucker.

Falco shed more AOL staffers — 700 more, or 10 percent, this year — and moved AOL’s headquarters business to New York. He drew on his advertising experience to work to complete AOL’s transition to an advertising company.

In March, Falco was ousted for Armstrong, who carried the tech bona fides that Falco never had.

Top U.S. officials can’t be sued for post-9/11 abuse

The former U.S. attorney general and the FBI director cannot be subjected to a lawsuit by a Pakistani man claiming abuse while imprisoned in New York after the September 11, 2001, attacks the Supreme Court ruled on Monday.

The nation’s high court overturned a ruling that Javaid Iqbal, who was held more than a year after the attacks, can proceed with his lawsuit against former Attorney General John Ashcroft and FBI Director Robert Mueller.

Iqbal, a Muslim, said in the lawsuit that he had suffered verbal and physical abuse, including unnecessary strip searches and brutal beatings by guards. He said he had been singled out because of unlawful ethnic and religious discrimination.

China to open first sex theme park

The developer of China’s first sex theme park promises that Loveland will be educational, helping adults enjoy a safe and happy love life.

But neighbors of the park now under construction in Chongquing in southwest China are not happy with what they see, The Guardian reports.

“These things are too exposed,” said Liu Daiwei, a woman who works as a police officer. “I will feel uncomfortable looking at them when other people are around.”

Lu Xiaoqing, who manages the park, said it is modeled on one in South Korea.

“Sex is a taboo subject in China but people really need to have more access to information about it,” he told China Daily.

“We are building the park for the good of the public. I have found that the majority of people support my idea, but I have to pay attention and not make the park look vulgar and nasty.”

The park is to include exhibits on the history of sex and sexual habits in foreign countries.

Panetta responds to Pelosi: CIA told the truth

CIA Director Leon Panetta Friday disputed House Speaker Nancy Pelosi’s charge the agency misled Congress during a 2002 briefing on harsh interrogation methods.

Pelosi Thursday said she was “misled” by CIA officials during the briefing about whether the United States was waterboarding — simulating drowning — alleged terrorist detainees. She said the CIA told her that the administration had determined that the practice of waterboarding was legal but hadn’t yet been used.

CNN quoted Panetta as telling agency employees, “Let me be clear, it is not our policy or practice to mislead Congress. It is against our laws and our values.”

Panetta sent a memo to CIA employees, telling them that agency officers “briefed truthfully on the interrogation of Abu Zubaydah, describing ‘the enhanced techniques that had been employed,’” The Hill reported.

During her news conference, the California Democrat said the CIA briefing she received was “incomplete and inaccurate,” and she called on the spy agency to release a full transcript of the briefing.

“We are an agency of high integrity, professionalism and dedication,” Panetta said in the memo. “Our task is to tell it like it is — even if that’s not what people always want to hear.”

He urged employees not to be distracted by events in Congress.

“My advice — indeed, my direction — to you is straightforward: Ignore the noise and stay focused on your mission,” Panetta wrote. “We have too much work to do to be distracted from our job of protecting this country.”

Former NBA player Tisdale dies after battle with cancer

Wayman Tisdale, a legend at the University of Oklahoma and former NBA player, died Friday morning after a two-year battle with cancer. He was 44.

A three-time All-American, Tisdale was elected to the College Basketball Hall of Fame this year. He averaged a remarkable 25.6 points and 10.1 rebounds per game at Oklahoma, and is the school’s all-time leader in both categories.

Tisdale opted to turn pro following his junior season and was the second overall pick in the 1985 NBA Draft by Indiana. He went on to average 15.3 points and 6.1 rebounds over 12 seasons with the Pacers, Sacramento Kings and Phoenix Suns.

Tisdale also won a gold medal as a member of the 1984 U.S. Olympic basketball team.

Obama goes on Al-Arabiya news channel

From AP
President Barack Obama on Tuesday chose an Arabic satellite TV network for his first formal television interview as president, delivering a message to the Muslim world that “Americans are not your enemy.”
The interview underscored Obama’s commitment to repair relations with the Muslim world that have suffered under the previous administration.

Now I just need a quick $9 Bill

The big dogs are back singing a different tune.
Ford said today that it is not running out of money and that it could survive and become profitable.
Also now the CEO of Ford is willing to cut his $21 million salary (poor baby).
Also “Ford acknowledged making ‘mistakes and miscalculations in the past.’”

Being that we are now officially in a recession. I am happy to see some contrition from Ford at least