AOL Clouds Icahn Battle

With Carl Icahn turning up the pressure on Time Warner's (TWX Quote) bosses, the AOL division looms as a bigger question mark than ever.

Icahn has said repeatedly in recent weeks that he wants the New York media titan to wake up its long-slumbering stock with shareholder-friendly moves like massive stock buybacks and a cable spinoff. Though Icahn has indicated he isn't purely unhappy with management, it's clear that he wants more out of the company than the legal settlements that have recently been trumpeted as a sort of progress.

Given the hideous performance of Time Warner stock since the AOL merger debacle, few observers have questioned the need for action. But CEO Dick Parsons has stopped far short of pointing toward the kind of sweeping gesture that Icahn and his allies want. And it could be that Parsons has been tight-lipped in part because he knows Time Warner needs to keep the cable systems to have any hope of reviving the flagging America Online business. ...