Bewkes: No full spinoff of AOL

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Time Warner Inc. likely would spin off only "a slice of AOL" if it decided to create a stock currency for acquisitions down the line, TW president and COO Jeffrey Bewkes emphasized Thursday amid continuing Wall Street talk about a potential sale or spinoff of the entertainment conglomerate's online unit.

Bewkes also signaled continued disinterest in a potential sale of the Time Inc. magazine division despite Wall Street analysts' recent suggestions that a divestiture could happen soon, and he also outlined the key terms necessary for TW to offer its movies via Apple Inc.'s iTunes.

Speaking here at the Sanford Bernstein Strategic Decisions Conference in a session that was webcast, Bewkes signaled that the company is considering a partial spinoff of AOL but wouldn't say when and how exactly it could become reality.

A complete sale or spinoff of AOL "wouldn't be in our interest or shareholders' interest at this point," Bewkes said, arguing that there was upside in the business to take advantage of given that AOL has been "doing a little better than expected" since the launch of a new strategy.

Asked whether a Time Inc. sale could make sense like the sale of Warner Music Group did, the TW president said the two businesses were "very different." He listed music market declines and piracy along with WMG's status as the fourth-ranked music major as key reasons behind the music firm's sale. He also said the music market continues to face a "controversial prospect."

Asked about the possibility of TW's movies coming to iTunes, Bewkes mentioned two key conditions: "an economic structure that makes it worthwhile, and adequate (digital rights management)."

He also signaled that Time Warner Cable would like the big broadcast networks to make primetime shows available on cable VOD a day after their first run like TW's HBO does with its big shows. However, he cited the fact that networks don't own all their shows as a key stumbling block.

TW is pushing for more collaboration on this front. For example, Bewkes said that for "Studio 60 on the Sunset Strip" on NBC, his firm gave NBC the right to put the show on the Web the next day and on Cox Communications' VOD platform.

Bewkes declined comment on the possible issuance of more TWC shares into the market but again lauded the unit for being "a great business."
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