Forrester Research analyst Lisa Allen, who tracks cyberspace forays by big media companies, said it's a good idea for traditional players to separate Internet operations.
"Media companies have been weighed down by political baggage and sometimes cluelessness about New Media," said Allen, who added that spinning off the unit would free them of such problems.
Time Warner (TWX) shares rose 1 3/4 to 72 1/8 by midday after a Wall Street Journal report that the media giant may spin off CNNfn and other Web units.
The financial news site appeals to a specific audience with content that runs deep in a specific area, she said.
By contrast, Time Warner's Pathfinder Web site has been using the company's vast magazine empire in too broad a way, trying to be all things to all people, she said.
Allen said Time Warner appears ready to overhaul Pathfinder, a move she applauded.
She gave high marks to Time Warner's deal with EBay (EBAY) to beef up its Warner Bros. Online Web site by adding online auctions.
"Instead of taking their off-line content and throwing it onto the Web, Warner Bros. Online is focused on creating a Web business with content, community and transactions," Allen said.
Quoting company officials, the Wall Street Journal said the Internet spin-off has been debated internally, but an offering is not imminent.
Written By Steve Gelsi, CBS MarketWatch