Makeover hoped to symbolize upbeat turn
NEW YORK — Giant AOL Time Warner will have a new name, a fresh logo and — insiders hope — an energized share price once it yanks AOL from its title, changes its stock symbol back to TWX and recalls its former corporate Web site, Timewarner.com.
The name change, most welcome to Time Warner staffers and many on Wall Street, comes about a week before the conglom’s closely scrutinized quarterly earnings and just as management is considering a major strategic move in a possible sale of Warner Music.
But first things first. Scuttling AOL, nearly four years after the merger was first announced, “will help reinforce the point” that top execs have been touting for more than a year — America Online is only one unit among many, said Richard Greenfield, an entertainment analyst at Fulcrum Global Partners. The division reps about 15% of the parent company’s cash flow.
News could be good
Overall numbers, particularly in cable networks and systems, promise to be relatively upbeat when AOL TW reports third-quarter results next Wednesday, he added. The studio, which posted stellar first and second quarter stats, may be squeezed by TV costs, given Warner’s prolific contribution to this season’s primetime sked.
AOL still struggles as subscribers migrate to broadband. But the picture could turn rosier next year. After all, online advertising is apparently still growing. Tech investors have been jubilant since last week when Yahoo! said its ad revenue soared 48% in the third quarter and boosted its full-year outlook.
Also, AOL can still cut costs. And next year, Greenfield said, AOL would be over a hump in terms of tough comparisons from a falloff in contracts it inked during the rah-rah Internet bubble.
Others worry more about the unit’s future and its impact on TWX.
But all seem to have renewed confidence in management, including Jeff Bewkes, Don Logan and their boss, chairman-CEO Richard Parsons.
While woes at AOL have dominated the headlines for several years, woes in the music biz have also been a hot topic. And it’s the old-line music company that’s on the block.
AOL TW has moved from potential partner BMG Entertainment into serious talks with U.K. group EMI, although no deal is imminent. A number of financial firms and out-of-work moguls like Edgar Bronfman Jr. are nosing around Warner as well.
Most Wall Streeters and industry players think a buyout firm is an unlikely acquirer, but the groups could be used for leverage to jack up the price in an eventual deal with EMI.
Last Thursday, Gunter Thielen, CEO of BMG parent Bertelsmann, said the company continues to talk to Warner as well as EMI and Sony Music about a possible merger.
AOL Time Warner shares closed up 0.13% Monday at $15.75.