Time Warner looking for Web deals

Company looking to speed up transformation of AOL

Time Warner chairman-CEO Richard Parsons said the giant conglom is on the prowl for Internet deals to help speed the transformation of AOL.

Speaking to investors at the CSFB media conference in Gotham, he also dubbed the next-generation DVD format war “unfortunate” and said it is confusing consumers.

The Net pacts, which would focus on Web advertising technology, could be “almost anything you could think of other than the really big established portals,” he said.

He said AOL is making progress after a dramatic overhaul last summer. It decided then to offer its service for free, foregoing hefty — but declining — subscription revenue to focus on the red-hot Internet advertising market.

Now, Parsons said, “We are looking for horizontal opportunities to strengthen our position in the advertising space.”

Last month, TW announced a deal to buy financial news search company Relegence. In August it acquired GameDaily, a videogame news and review site.

After a long slog, TW — in part thanks to renewed optimism about AOL — is back in investors’ good graces. The stock is up 24% since the Netco’s strategy shift. TW also has been buying back billions of dollars of its own shares.

TW has been selling off AOL’s European businesses, but Parsons said it’s going to hold on to the Internet access business in the United States.

“I think we’ve got quite a valuable annuity stream in our access business that I’m not sure some private equity player or some other access provider would pay for,” he said.

“From Time Warner’s perspective, there is still some value that we can get out of the connections to homes for our other businesses,” he added.

On the DVD front, Warner Bros. has backed both the Toshiba-led high-definition DVD, and Sony Corp.’s Blu-ray. But Parsons said he didn’t think building Blu-ray into the new PlayStation 3 game console will give Sony much of an advantage. Sony is touting PS3 as a big leg up for Blu-ray.

“People get those things to play games, not watch movies,” Parsons said.