AOL to Face Dial-Up Life as Standalone Company

The end is in sight for possibly the worst corporate merger in history. Time Warner Inc. confirmed today it will sell AOL, the dial-up Internet service provider it bought in 2000, hoping to spark a trend-setting union of old and new media.

The two companies have been discussing the spinoff idea for more than a year. Now that discussions have evolved into reality, Time Warner says it will turn AOL into a standalone public company. That seems like a daunting proposition for dial-up-focused AOL. Still, if EarthLink can do it, what’s to say AOL can’t survive in a broadband world? Perhaps the two even will join forces, as analysts have speculated for some time they should.

Before it spins off AOL, Time Warner must buy back Google Inc.’s 5 percent stake. Time Warner also provided minimum details about its plans, which makes valuing AOL difficult. The Wall Street Journal quoted a UBS analyst as valuing AOL around $4.2 billion.