Time Warner Inc.'s struggle to sell AOL is putting more pressure on the its stock price as an advertising slowdown spreads to the Internet, reports Bloomberg News.
Microsoft Corp., which has discussed a possible combination with AOL, said that sales from its Web unit missed analysts' estimates, while Google Inc. reported a slowdown in the growth of consumers clicking on Internet ads.
The slump diminishes AOL's value and adds urgency to talks about a sale, said investor Anthony Valencia of TCW Group Inc.
``The longer the wait, the chance of value going down increases considerably,'' said Valencia, who is in Los Angeles and helps manage $130 billion in assets, including 23 million Time Warner shares as of March 31. AOL has ``become yesterday's story in the Internet world,'' he said.
Time Warner, the world's biggest media company, has fallen 11% this year in NYSE trading on investor concern about the economy and the outlook for advertising. That adds to an almost 70% slide since AOL bought Time Warner for $124 billion in a 2001 takeover that sparked $100 billion in writedowns and shareholder lawsuits.
The
value of AOL's ad unit, along with its declining dial- up Internet-access division, has dropped to less than $10 billion from around $15 billion two years ago and will fall further, said Richard Greenfield, an analyst at Pali Capital in New York.
