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Breaking AOL in Two

Time Warner's plan to separate AOL's free, ad-supported portal from its dial-up business could lead to closer ties with Google
Time Warner CEO Jeff Bewkes.
Time Warner CEO Jeff Bewkes. Paul Hawthorne/Getty Images

Time Warner (TWX) CEO Jeff Bewkes has finally begun to exorcise the demons of Jan. 10, 2000. That, of course, was the day that the Old Media behemoth announced it was selling itself to the high-flying Internet company America Online in a $164 billion combination, one of the costliest takeovers in corporate history.

Bewkes said during a Feb. 6 earnings conference call that he plans to bisect AOL, separating its moribund dial-up access business from its free, ad-supported portal. The move, the biggest structural change to AOL since it acquired Time Warner, will let AOL focus more fully on its faster-growth advertising business. It could also presage the sale of one or both pieces of AOL.