Time Warner seeking online-ad companies
Time Warner CEO Richard Parsons is eyeing more deals next year focused on online ad technology to bolster the transformation of its AOL Internet division.
Parsons said Tuesday that AOL is making progress after deciding in the summer to give away most of its services for free to boost online ad sales. AOL also stopped marketing its dial-up Internet service.
“We are looking for horizontal opportunities to strengthen our position in the advertising space,” Parsons said at the Credit Suisse media and telecom conference in New York.
Time Warner shares have risen 24 percent since the announcement of AOL’s strategy change on August 2. A $20 billion stock buyback, which Parsons said is likely to be completed in the first half of 2007, has helped boost confidence in the stock.
Asked by the moderator if there were any “size limitations” to its potential acquisition targets, Parsons said, “No. Almost anything you could think of other than the really big, established portals is within striking distance for us.”
He declined to specify which companies it will consider. But he told Reuters in an interview last week that Time Warner is looking at so-called ad insertion technology that lets companies place ads that are relevant to a particular viewer’s tastes.
In November, the company bought financial news search company Relegence. In August, it purchased video game news and review site GameDaily.
Time Warner also said it was unlikely to sell off its Internet access business in the United States, which it had done in its European regions.
“I think we’ve got quite a valuable annuity stream in our access business that I’m not sure some private equity player or some other access provider would pay for,” he said. “From Time Warner’s perspective, there is still some value that we can get out of the connections to homes for our other businesses”
Separately, Parsons talked about its upcoming plans to begin selling movies that are downloaded to kiosks in Wal-Mart Stores that can then be transferred to DVDs.
Parsons also said the company is seeking a way to offer digital movies on a subscription basis. “We’re looking at ways of working with (movie) studios to have some sort of subscription format that’s electronically distributed through the existing windows.”
Time Warner’s movie studios have backed the two competing high-definition DVD technologies — Toshiba’s HD DVD and Sony’s Blu-ray format.
But Parsons poured cold water on Sony’s hopes that building its Blu-ray technology into its just-launched PlayStation 3 video game console would give it an edge in the technology fight.
“Do I think that the game console platform is really going to drive the conversion? I don’t think so,” he said. “People get those things to play games, not watch movies.”