With Jeff Bewkes' long-anticipated announcement that Time Warner will split off its cable business, the focus again turns to what will happen to AOL, the company's struggling internet unit.

During the earnings conference call, Bewkes and John Martin, the company's chief financial officer, sought to cast AOL's performance in a positive light despite a 38 percent decrease in subscription revenues and a substantial decrease in operating income this quarter from the same period last year.

Martin explained the 25 percent decline in operating income, saying that the first quarter of 2007 had been the highest quarter of the year, making a comparison "tough." And he said that this quarter's weak ad increase—1 percent—would improve substantially by the second quarter.

The good news included 52 billion page views—up 6 percent from the first quarter a year ago—and record highs for traffic and viewer engagement in March.

Still, the unit remains a thorn in the company's side.

"For the last two conference calls, Bewkes has talked about dividing the company into three buckets: content, AOL, and cable," says Chris Marangi, senior vice president at Gamco Investors, the asset management and financial services company led by Mario Gabelli.

Cable growth has been strong, and pretax operating earnings for content—Time Warner's publishing, film, and television-network properties—grew 10 percent in the first quarter. So Marangi says it's natural for investors to turn their focus to AOL, the weak link.

Bewkes has made much of his intention to separate AOL's internet-access business, once the dominant player in its field, from its burgeoning online- advertising business, Platform A. This morning, he said that such a change would "increase the accountability and enhance the strategic flexibility" of both pieces of the business.

"By splitting the two, it's clear that the core focus is on the ad-platform business," says Fred Singer, a former senior vice president at AOL and the current C.E.O. of Anystream, a company that produces and distributes streaming media. Singer believes that to remain viable in the face of a Microsoft-Yahoo merger, which would take away two potential acquirers for AOL, Time Warner's best bet is to restructure AOL around the new ad platform.

As for the access business, a cash-flow generator, AOL could keep it around for cash or sell it off to a company like Earthlink. Marangi speculates that it could even make a good buyout target, should that market return. "Some bottom fisher could come along and buy it, put on a lot of debt, and run it as a cash cow," he says.

Such a scenario is far away—for now, Time Warner doesn't break out the profitability of AOL's access and advertising businesses separately, although Bewkes has promised to provide more financial color in the future. That did nothing to ease analysts' concerns; their questions on the conference call focused almost entirely on AOL.

Does the business have sales-channel issues? Had it missed opportunities on pricing?

A particularly pointed question about Bebo, the social-networking site that AOL acquired in March, touched on the site's unknown revenue and profitability and wondered about the chain of command for the acquisition approval. After a very long pause, competing voices spoke at once.

Finally Bewkes cut through. "If you're asking did I approve acquiring Bebo, yes!" But he declined to break out profitability numbers, saying that the acquisition hadn't closed yet.