Time Warner is not interested in selling its America Online Inc. (AOL) unit, and instead is seeking only a partner to boost advertising revenue, the Associated Press reported Tuesday.
“We are not interested in selling AOL,” Time Warner Chief Executive Officer (CEO) Richard Parsons [CQ] was quoted as saying at a press briefing in Los Angeles.
Time Warner is attempting to transform AOL’s revenue model from one that relies on paid subscriptions to one that makes money from advertising, the report says.
Also on Tuesday, The Wall Street Journal reported that Time Warner may be nearing a deal with Microsoft to build an online advertising service designed to compete with Google.
The two companies are moving toward a deal to combine advertising-related assets, according to the report, which cited anonymous sources.
But the report said Time Warner could still reverse course and instead deepen its relationship with Google. AOL currently uses Google as its main provider of Internet search capabilities, but the company would drop Google in favor of Microsoft’s MSN search service if the two companies reach a deal, according to the report.
Time Warner has been in discussions with Microsoft, Google and Yahoo over possible tie-ups with AOL, but so far no deal has been reached. Last month, Yahoo ended its bid for the company.
Google has stressed the importance of its current partnership with AOL, and said teams from both companies collaborate on a variety of activities. Google shares advertising revenue with AOL based on the traffic it gains through AOL’s Web pages.