With the AOL deal being considered one of the business mistakes of the century, Time Warner (TWX) is finally looking like it may have had a few brains in the deal.
The subscription service had nowhere to go and their customer service made it not worth the headache to have. So they decided to make AOL a media company, rather than an ISP.
They're looking like geniuses at the moment with advertising revenues exploding beyond all expectations. Most analysts believed that they would increase around 30 percent on the top end; but they did much better coming in at a 46 percent increase in ad revenue for the quarter.
The subscription revenue dropped 13 percent at the same time; an expected consequence of the strategy shift.
With online advertising revenue being a growing trend for years to come, AOL is actually positioned to explode in growth in this area. I would be surprised if rumors of their being on the market are true at all with these numbers. Warner would have to be stupid to get rid of them now.
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