Time Warner: What Digital Excuse Will They Have After Selling off AOL?

(PaidContent.org)  This story was written by Rafat Ali.

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Diane Mermigas has a blistering column about Time Warner's (NYSE: TWX) failures in digital media, and takes them to task for lacking the strategic mindset for the transformation. Selling non-core assets and relying on cyclical traditional film and TV hits isn't going to cut it, she says, running counter to what NYT said in a long story a week ago about TW's future in entertainment business.

Her argument: Time Warner is "just another media conglomerate digital wannabe dabbler"...If Time Warner had rigorously learned from and integrated AOL into every fiber of its being, it wouldn't be thinking about selling the Internet portal to Yahoo (NSDQ: YHOO) or Microsoft (NSDQ: MSFT) or about unloading its branded magazines from Time Inc. Also, buying NBCU if it comes up for sale won't do it, because both companies have been so obsessed with protecting existing content with walled gardens.

"The estimated $12 billion sale of AOL will add a potential $2.50 of near-term per-share upside to Time Warner, but do nothing to fortify its digital content future. If digital content constitutes only 10% of Time Warner's business today, maybe it's because it functions as a business afterthought. By next year, a streamlined and simplified Time Warner will have nothing else to think about, except maybe what to use as an excuse for digital content failure."