Jeff Bewkes, Time Warner chairman and CEO, said in a statement that the spinoff will "provide both companies with greater operational and strategic flexibility." To complete the transaction, Time Warner, which currently owns 95% of AOL, has to purchase the remaining 5% from Google, according to a company statement.
Experts speculated earlier this month that the probability of a spinoff depended on whether AOL could attract more Internet users and advertisers to its Web site to compensate for the decline of dial-up subscribers.
In what was then hailed as a "historic merger," AOL announced plans to acquire Time Warner for about $182 billion in January 2000.
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