At least they recognized the problem

The New York Times has an article by Tim Arango about the TimeWarner/AOL debacle:

Time Warner is inching closer to an untangling of what many consider one of the worst mergers in American corporate history. In a regulatory filing Wednesday, Time Warner said it was nearing a decision to shed America Online and put an end to the travails that began with the merger in 2000 of the two companies, a deal that has resulted in the evaporation of more than $100 billion of shareholder value. “Although the company’s board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions,” the company said in the filing.
The announcement, which was not unexpected, came on the same day that the company reported first-quarter earnings, which surpassed Wall Street analysts’ expectations. The company, which in addition to AOL also owns the Warner Brothers movie studio, the cable networks TNT, TBS, CNN, and HBO and the Time Inc. publishing unit, said revenue declined seven percent to $6.9 billion, when compared with the same period last year.
Revenues from publishing, AOL and Warner Brothers all declined, while revenue at the cable networks, which have been the most durable segment of the media industry during the recession, rose to $2.8 billion, from $2.7 billion. Net income for the quarter was $661 million, or 55 cents a share, compared with $771 million and 64 cents a share in the previous period. Excluding some items, earnings were 45 cents a share. By this measure, the company beat Wall Street analysts’ expectations of 39 cents a share, according to Reuters Estimates.
At AOL, revenue decreased 23 percent, to $867 million. Subscription revenue fell 27 percent, while advertising fell 20 percent. At the magazine publishing division, which includes Sports Illustrated, Fortune, People and Time, revenue fell 23 percent, mostly because of a thirty percent decrease in advertising.
At Warner Brothers, while revenue dipped seven percent, operating income increased ten percent to $308 million, partly because of reduced marketing and advertising costs for movies. The cable networks unit continued to perform well. Its revenue grew 6 percent, to $2.8 billion, while operating income rose ten percent.
Under Jeffrey L. Bewkes, who became chief executive in December of 2007, Time Warner has become a stripped-down media conglomerate focused on producing content, rather than the delivery of it. This year the company, once the world’s largest media entity, spun off its cable division, Time Warner Cable, into a separate publicly traded company.

Rico says he wouldn't have bought AOL on a bet, and can't imagine why the smart boys at TimeWarner thought they were a good idea...