AOL to Be Split Into Two Separate Businesses

August 6th, 2008 at 12:00 am
 


america online

AOL has been America’s darling for the longest time.  Back in the 90’s there was no other place to be in cyberspace except AOL.  When that changed, AOL suffered and was acquired by Time Warner in the biggest acquisition deal to date.

Now however, AOL is again in rough seas after reporting declines in their revenues for the second quarter this year.  the figures were apparently  bad enough for AOL to consider taking drastic measures, self mutilation.

AOL will be splitting itself into two separate businesses  according to their CEO Jeff Bewkes, "During the quarter, we agreed to the terms of our planned separation from Time Warner Cable. In addition, weve made the key decisions that will enable us to run AOLs access and audience businesses separately beginning in 2009."

So that’s audience and access, the two new divisions spawned by the AOL mitosis.  Access is the ISP part of the business, dial-up and subscription (formerly known as ‘the Internet’ itself).  Audience on the other hand is their advertising business which includes content.

As bad as it may sound, this is not a surprising move in the corporate internet.  Microsoft is splitting up it’s Web and Platform divisions, as well as Motorola who have split their semiconductor and mobile divisions.

A companies self mutilation does not mean anything at first.  They’ll be run by the same company and same people only with autonomy over their resources.  However, the biggest advantage of having two separate businesses is that if you’re Time Warner and you own AOL that split into two, you could always sell one ad keep one or sell them both to different buyers.  Good riddance.