What In the World Is Time Warner Going To Do With AOL?

Kevin Maney sees a pickle: OK, so at this point AOL's results are so bad they're dragging down Time Warner. But we kind of knew that. Now Time Warner says it's teeing up AOL to be spun off or bought in pieces or as a whole. Microsoft and Yahoo are routinely trotted out as likely buyers.

Yet if AOL is performing that badly, why would anyone else want to buy it -- or even pieces of it? Add in another problem: AOL is a gigantic advertising partner with Google, which sells a vast amount of the ads that run on AOL. Yahoo and Microsoft see themselves as Google competitors. Beefing up AOL and bringing it more traffic would help Google. Pulling out Google advertising and replacing it with ads served from Microsoft or Yahoo would result in a huge drop-off of AOL revenue. Damned if they do and damned if they don't.

Let's get something else straight: Microsoft and Yahoo would be interested in AOL because it still generates a whole lot of traffic. AOL's AIM is still huge. If AOL is screwed up, it's because Time Warner's management screwed it up, especially over the past few years. The company's ad platform, Platform A, is a train wreck. AOL made what now seems like a moronic purchase of Bebo for $857 million early this year.

AOL could've been a decent business. If it's ruined, Time Warner management only has itself to blame.