Time Warner And The Curse Of The Conglomerate

Posted by: Jon Fine on February 6, 2008

Three headlines coming out of Time Warner’s earnings call today, which happened to be the first run by new CEO Jeff Bewkes:

1. The company is mulling whether New Line Cinema should be folded its larger studio sibling Warner Bros. This, actually, is new-ish. My colleague Ron Grover had a nicely prescient piece concerning this notion earlier this week.

2. The company is exploring options with regard to its Time Warner Cable unit. Fair enough. But this is a move that has been discussed for, well, months. At least. Maybe longer.

3. AOL will split off its access business—its remaining dial-up customers--from the rest of its online business. This paves the way for the sale of the access business.

This, too has been percolating in the press for months. And Bewkes warned this process is complex enough that it will be months before it can be accomplished.

This is the thing--the curse--about conglomerates like Time Warner these days. It takes so long to get something accomplished that, by the time it finally gets done--after being test-driven in the press, and after a strategic review is announced months later, and after a months-long process takes place to accomplish what's already been telegraphed--you don’t get any bang out of it. (Relatedly: Bewkes’ vocalizing these possibilities didn’t thrill investors, either, judging from how its stock closed the day in a sluggardly way.)

Meanwhile, as for other future possibilities, Bewkes said this in response to a question about its interest in retaining its print division, Time Inc.:

“It’s a good business, we think, and as it expands out from print into digital . . . We think it can turn into a fairly strong growth business in the middle term. It is growing now.

We think it’s got real promise. [But] it does depend on our being able to demonstrate that to ourselves and to our investors.”

In other words: If it does exactly what we hope it will, it’s fine. If not, well . . .

That sound you are hearing is that of Time Inc. CEO Ann Moore and all of her minions working late tonight. And many other nights, too.