Time Warner Inc. (NYSE: TWX) is one of the world’s largest media conglomerates. It operates Time Warner Cable, America Online, and TV programming and magazines such as Time Inc., Warner Brothers, and HBO. Its publishing and AOL business segments have been hard hit with falling advertising revenue. Since 2006, AOL has been trying to remain afloat by operating an ad based business model which has not demonstrated great results.^[1] Advertising revenue for AOL fell 18 percent in 2008 due to strong competition from search engines such as Google and Yahoo. Additionally, its publishing business continues to struggle as advertising revenues continue to shift to online sources; this segment’s revenue fell 7 percent in 2008.^[2] However, in December 2009, AOL announced spun-off from Time Warner, making it an independent company again for the first time since the beginning of the 2000's.^[3] Experts at Barron's considered the spin-off to be a bargain, with AOL valued at around $2.4 billion, down from the expected $3 billion AOL's market capitalization was expected to be valued at by the spin-off date.^[4]

Although its filmed entertainment business produces successful block buster movies like “The Dark Knight” and franchises like “Harry Potter” and “Ocean’s”, a continuing trend of falling movie theater attendance is troublesome for the company; this decrease can be attributed to high priced movie tickets along with poor economic conditions, and as HDTV’s become more inexpensive and home theater systems more readily feasible, consumers will substitute to the latter option.^[2]

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