Parsons: Time Warner to hold on to AOL

Time Warner isn't focused on selling or spinning off AOL, but rather in seeing it succeed in online advertising.

Time Warner wants AOL to complete successfully its transition to an ad-supported business, and isn't mulling "structural" changes to it, such as selling it or spinning it off, Time Warner Chairman and CEO Richard Parsons said Tuesday.

"We're doing better than I had hoped [with AOL] but we still have a long way to go. We have to make sure we stay tightly focused there," Parsons said at a Goldman Sachs conference, responding to questions from a financial analyst.

Time Warner's priority for AOL is to make sure the Internet subsidiary executes properly its transformation from a business based on subscriber fees for dial-up Internet access, and takes full advantage of the opportunity in the vibrant online ad market, he said.

Two key issues are to increase AOL's own ad inventory that it sells directly to clients, as well as fortifying the ad platform that allows it to act as a broker and distributor between advertisers and third-party Web sites.

"Those are the big executional challenges, given where we're coming from with AOL and the speed at which the industry is moving and the competition," said Parsons, whose appearance was webcast. "That's where the focus is, not on doing something structural with AOL."

Parsons said that the dynamics of the online ad market are shifting towards this latter business of ad brokerage and distribution, whose margins are smaller compared with the direct-sales inventory.

The reason for this change is that advertisers increasingly see value in the broader reach that ad networks provide, as opposed to buying ad space in a specific site, like a portal, he said.

"It's kind of exciting in one sense [and] it's a little daunting in another sense because it's all moving so fast, but we think we're in the middle of it and we think we've got the right tools, management and technologies to play aggressively," he said.

After recently acquiring and several other companies that specialize in behavioral targeting, video ads and mobile ads, AOL has a leading position in this segment of the market, he said.

"I think we have the lead in that space right now, so it's ours to lose," he said.

In fact, AOL can and should be a growth driver for Time Warner, as long as it can increase its revenue at or above the growth clip forecast for the online ad market, Parsons said.

That didn't happen in the second quarter, when AOL's online ad revenue grew 16 percent, leading some financial analysts to question AOL's ability to capitalize on the online ad opportunity.

Currently, the U.S. online ad market has been growing its spending between 25 percent and 35 percent, according to reports from the Interactive Advertising Bureau.

Still, Parsons is optimistic about his Internet subsidiary, which this week announced that it plans to move its headquarters to New York City and that it has integrated its various ad networks into a single platform.

This platform, called Platform A, meshes, behavioral targeting specialist Tacoda, mobile ad unit Third Screen Media, video ad specialist Lightningcast and ad serving unit AdTech.

"Everything we're doing in AOL is around trying to create a platform that has broad reach, increase the amount of our own inventory and then have [the tools] to optimize [the ads]," Parsons said.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Logitech Ultimate Ears Wonderboom Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?