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It's Showtime for Time Warner

Wall Street will breathe easier at Time Warner (TWX - Get Report) now that the long-awaited baton-pass from Dick Parsons to Jeff Bewkes has officially taken place, but how long will the honeymoon last?

The world's largest media conglomerate confirmed Monday that Bewkes, the company's president and chief operating officer, will take over as CEO at the end of the year, while Parsons will become chairman.

Shares of Time Warner have been largely stagnant in Parsons' five-and-a-half-year tenure, which began after the company's disastrous merger with Web giant AOL and before the bursting of the dot-com stock bubble.

Now, investors are hoping Bewkes will bring much-needed changes at the company to get the stock moving. Namely, shareholders are rooting for a sale or spinoff of AOL.

"Parsons is the last man standing who was part of the Jerry Levin cabal that put the AOL deal through," says Porter Bibb, managing partner with MediaTech Capital Partners. "It's probably psychologically and emotionally impossible for him to explicitly divest from what most people recognize as the worst business deal in history."

Bibb points out that Bewkes is viewed as more of an operator, while Parsons is seen as a diplomat -- which could lend itself well for another job.

"There is widespread speculation that Parsons will run to be the next mayor of New York City," Bibb says. That's a role that he could be well-suited for."

In some ways, Time Warner is not unlike a government bureaucracy. It's a sprawling conglomerate of disparate business units that don't work together particularly well. The magazines at Time Inc., such as Fortune and Time, have their own Web sites, but they're not well integrated at AOL. The company owns two movie studios -- Warner Bros. and New Line Cinema -- that could be consolidated, or one could be spun off or sold.

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