Time Warner chief executive Richard Parsons will step down from the post and hand over the reins to its president and chief operating officer Jeffrey Bewkes, the company announced today.

Bewkes will take over on January 1, 2008, and Parsons will retain his position as chairman of the company for now. The news had been expected to come this week, and Parsons had made it known long ago that Bewkes would be his successor.

"Today's decision is the culmination of a thoughtful and disciplined process that began in early 2006, when Dick Parsons initially approached the board to discuss the timetable for the C.E.O. succession," said board member Robert Clark in a statement. "The board is delighted that Jeff Bewkes will be the next C.E.O. and that Dick Parsons will continue to serve as chairman of the board."

The move comes a tumultuous five years after Parsons took control of the struggling media giant. Time Warner stock, which has been essentially stagnant since Parsons took the helm, gained more than 1 percent on the news this afternoon.

Investors are hoping that Bewkes will usher in a new era at the company by possibly spinning off units and reorganizing existing ones with more streamlined operations. Poor performance at the company's AOL and cable-television units has escalated in recent quarters and weighed on the company's shares. In addition, the Time Inc. magazine business has been forced to make significant cuts in the wake of a declining print advertising market.

Bewkes has been with the company for 20 years and made his mark as the head of HBO. Unlike Parsons, he is known to have little emotional attachment to the company's faltering business units. He is regarded as an efficient manager with a clear aim of improving profitability by whatever means necessary. The change should be a welcome one for investors, but it could mean more casualties for some Time Warner employees.

"I welcome this opportunity to work with my colleagues and the board to lead this company successfully into the future," Bewkes said in the statement. "We have a lot to do, and I’m intensely focused on building shareholder value."

Time Warner will announce third quarter results on Wednesday. Analysts expect it to report a profit of 24 cents per share.