Can the AOL debacle get any worse?

Late yesterday Time Warner confirmed that it would disclose its business strategy for the Internet unit AOL – at the same time Time Warner dismissed a report in the Wall Street Journal that it will lose up to $1bn over the next three years with its change in strategy.

The statement said – Recent media reports appear to be based on unauthorized disclosures, including of incomplete and largely erroneous financial information. The company cautions investors not to draw conclusions regarding AOL’s future strategy until the company’s presentation on August 2.

The statement was released after the Wall Street Journal reported the potential loss on Tuesday, causing Time Warner’s stock to fall by as much as 2%.

As outlined in previous articles in The Business News Source, the strategy is part of AOL’s plans to stop charging users for many of its services and recuperate larger long-term gain from advertising instead.

According to the Journal AOL’s subscriber numbers are expected to drop from the current 18.6m in the USA to 6m over this timeframe.

It seems perverse that just as other companies are merging services to provide so called ‘four play’ solutions (Broadband Internet, Cell Phone, Land Line Telephone and Video services) Time Warner has squandered its lead after the merger with AOL.

Even more ironic is that AOL has put its European units up for sale, with some likely to be snapped up and eventually re-branded to further the ‘four play’ stance in Europe – what an opportunity Time Warner blew.

Sources

Wither AOL? The Business News Source

AOL dotcom madness in UK The Business News Source