Time Warner is to split up AOL - the ailing internet service provider and ad platform which paid $165bn for the film studio in 2001.
In 2006 AOL announced free access to its portal and email services as it tried to move away from the declining internet access business and into the online ad sales business.
AOL Time Warner's CEO Jeff Bewkes, said: "AOL has been transitioning from a declining internet access business to an online advertising business... to complete this we need to separate AOL's access business from its online advertising and advertising platform business. This will increase the strategic choices open to AOL."
AOL made revenues of $1.251bn in the three months ended December 31 2007, down 32 per cent from $1.838bn in the same period of 2006. This drop was mainly blamed on the sale of AOL's access business in France and the UK.
On 31 December 2007 AOL had 9.3m US subscribers, down 740,000 on the last quarter. During the last three months of 2007 the company had 109m average monthly domestic unique visitors and 49bn domestic page views, according to comScore Media Metrix.
Time Warner saw revenues grow six per cent to $46.5bn compared to 2006. Operating income jumped 23 per cent to $8.9bn