AOL's future to be decided soon
At UBS, Jeff Bewkes talks acquisitions, content dealsNEW YORK -- Time Warner Inc. is looking to decide the future of AOL "fairly soon," president and CEO Jeff Bewkes said Wednesday, and he signaled limited appetite for major acquisitions.
"The history of our company would make you concerned about the dangers of acquisitions if they are not done carefully," and big deals have been a key cause of value destruction across the industry, he said in a luncheon keynote interview here at the 36th annual UBS Global Media and Communications Conference.
That said, he wouldn't rule out a play for assets that would fit in with the company's core content businesses -- if it makes financial and strategic sense.
Bewkes also acknowlegded the difficult current environment in advertising and beyond.
Tribune Co.'s bankruptcy filing due to a big pile of debt, for example, could cause some revenue ripple effects, as TW sells programming to Tribune, he said.
Meanwhile, the online and magazine ad market has gotten worse since TW's recent earnings report, but the Turner cable networks continue to do well, Bewkes said.
He also argued that the recession is an opportunity to keep all business units in lean shape, signaling there could be more cost controls and cuts ahead if needed. The company restructured its film unit and had corporate reductions earlier this year, followed by recent layoffs at magazine division Time Inc. "We continue to look at opportunities," he said.
The TW CEO declined to provide further details on AOL beyond saying talks with various online players, such as Yahoo and Microsoft, about various potential deals continue.
Traffic at AOL is up, but ad sales have been affected by the economic downturn and have been "disappointing to us and to you," he told investors.
In another update on the conglomerate's portfolio, Bewkes said the planned spinoff of TW Cable is on track for early 2009.
He also reiterated that the recent financial crisis and the credit crunch should not affect TW's film operations or hurt its existing or future financing arrangements. "We'll continue on," he said. "And the partners we have now seem good to go" with the current structures.