You can't keep a bad idea down.More than a year after speculation began in earnest that AOL Time Warner ( AOL) could be due to spin off America Online, the
Christmas in JulyThe obstacles to any such spinoff are large and numerous. For example, any deal in the foreseeable future would seem guaranteed to bring only fire-sale prices. Unlike other top-tier Internet properties that have been favored by the market -- Yahoo! ( YHOO), eBay ( EBAY) and Amazon.com ( AMZN) -- Wall Street has been valuing AOL at or near zero for some months now, as the company continues to lose ground in the all-important subscriber-count game. With AOL Time Warner delaying the initial public offering of its more-stabilized cable properties because of market conditions, any valuation of the online service, still in turnaround mode, is likely to bring bottom dollar.
In fact, AOL's online ad sales business, which not only crashed but also incubated overenthusiastic and troublesome revenue-recognition practices, is actually showing year-over-year progress, says the company. Additionally, as humiliating and frustrating as the AOL experience must be for former Time Warner executives, getting rid of AOL at Case's behest would have to be even more humiliating, because it would amount to selling
a pig in a poke cheaply back to the man who you think overcharged you for it in the first place. received much less support than other directors at the company's recent shareholder meeting. "I have a feeling," says the investor, "there are very few people out there would miss Steve Case if he were to leave quietly."