NEW YORK — When AOL flashed $147 billion in stock puffed up by the dot-com boom, Time Warner, one of the world’s biggest media companies, fell into its arms in 2001. They swooned over their combination of Internet access and traditional media.
But before long, reality intruded. People were saying the marriage wouldn’t last. Finally, after years of denial, Time Warner filed for the corporate world’s version of a divorce Thursday. It said it will spin off AOL as a separate company and get on with its life as a movie, TV and publishing conglomerate.
Now AOL will try to bounce back even as its once-ubiquitous dial-up Internet-access business fades away and its online- advertising business struggles to pick up the slack.
The fix-it challenge falls to former Google Inc. advertising executive Tim Armstrong, 38, who was hired as AOL chief executive in March to try to restore the luster to a brand once known as America Online.
Time Warner owns 95 percent of AOL and will buy out Google’s 5 percent stake during the third quarter for an undisclosed amount. From there, AOL and its 7,000 employees will be spun off into a separate publicly traded company near the end of the year.
“For AOL, becoming a stand-alone company will give it more focus and strategic flexibility,” Time Warner’s chief executive, Jeff Bewkes, said at Time Warner’s annual shareholder meeting Thursday in New York.
Time Warner will focus on movies, cable TV and magazines such as Time, People and Sports Illustrated.
