AOL chief denies spin-off rumours

AOL Time Warner has scotched rumours that it is considering spinning off its online business.

New chief executive Richard Parsons is the first official at the company to deny that such a sell off is on the cards, despite contradictory reports from internal sources within the company.

AOL has been hit by falling online advertising revenues, and has been roundly criticised by analysts for its 'broadband' internet access plans. As a result the company has seen its share price fall by 40 per cent this year.

Many saw it as only a matter of time before AOL dumped what was perceived as a lame duck. But Parsons maintained that the idea made no sense, although he did acknowledge that there were "serious questions" to be answered at AOL.

Speaking at the National Cable Television Association conference Parsons said: "There is no analytical reason that disaggregating the company will increase value.

"There is no current thinking about breaking up the company. The idea of spinning out AOL appears to have been little more than idle talk by frustrated employees and shareholders."

Parsons said that he was irritated that all of the attention has been focused on AOL, while other divisions, such as the film and cable systems groups, have done well.

AOL needs to move its customer base of dial-up users to high-speed services and improve online advertising, he said.