Time Warner planning to spin off AOL

AOL recently redesigned its home page

Nearly a decade after its historic merger with Time Warner, AOL is set to again become an independent company.

The struggling former internet giant announced on Thursday that it would be splitting off from Time Warner and operating as a separate publicly traded company.

"We believe that a separation will be the best outcome for both Time Warner and AOL," said Time Warner chairman and chief executive Jeff Bewkes.

"We believe AOL will then have a better opportunity to achieve its full potential as a leading independent internet company."

Under the terms of the deal, Time Warner will repurchase the five per cent stake in AOL it sold to Google and then spin the company off as a completely separate entity.

The two companies have operated as a single entity for the past nine years. When Time Warner announced the purchase of AOL in 2000, the deal was seen as the high point of the dot-com boom.

Since the merger, however, AOL has seen its once-lucrative dial-up internet business wither as the company looked to transition from ISP and internet portal into an online content provider.

Earlier this month, the company rolled out a new home page design.

AOL chief executive Tim Armstrong expressed hope that the move will allow the company to further define its new image and status.

"Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options," Armstrong said.

"We play in a very competitive landscape and will be using our new status to retain and attract top talent."