They’re splitting, but it’s not what you may think. Time Warner said on Wednesday it plans to fully separate its cable services division, in a nod to Wall Street’s demands to refocus as a pure media content company to boost an ailing stock price, according to Reuters.
That ailing stock price has a lot to do with AOL, which is the other part of Time Warner that analysts expect will split off from the mothership. It’s also the subject of ongoing talks with rival Yahoo for an acquisition—one that could remake the Internet services landscape both on the desktop and on mobile devices.
The report said that AOL’s quarterly revenue fell 23 percent to $1.1 billion due lower subscription revenue; meanwhile, online ad revenue rose only 1 percent. That’s not a good sign and indicates that AOL’s makeover plan isn’t working. “Time Warner stock has lost a third of its value since the beginning of 2007, as AOL’s future continued to worry investors, who have also sent shares in the entire media sector lower on fears of an advertising recession.”