Parsons also hints at the fate of AOL and Cable

Time Warner Inc.'s (NYSE: TWX) Dick Parsons commented earlier today about not getting out of publishing. Reuters is also reporting that the company is weighing its stakes in Time Warner Cable (NYSE: TWC) and in its AOL unit. A timeline has even been given for a potentially complete spin-off of Time Warner Cable, although that was indicated as a down the road decision, but none has yet been made.

In the past, Parsons had been leaning more to a "Keep AOL in the family" stance, but today's article is indicating that a consideration of a sale may come by the end of the year. Speculation has been more than abundant on this, especially given the impending "cash out" date at which Google has the option to essentially force Time Warner to either spin-off AOL or pay cash at the company's then-market value.

If the transition of AOL from a paid access service into a free content service has been as successful as the company claims, why then would it be reviewed for a potential sale? Follow the money. The $1 billion investment from Google (NASDAQ: GOOG) for a 5% stake put in a $20 billion implied price tag on the unit. Is the unit worth more than that, or less? That's what the review will determine.

Instead of making a full sale, Time Warner may consider a partial spin-off of AOL back into a public company. This would give the online media company its own currency that is less dogged by the currently-unpopular conglomerate model so that it could make non-cash acquisitions. Time Warner should consider this route long before any outright sale, particularly considering that there would have to be additional goodwill write-downs for the added losses sustained. AOL now has many online ad operations that can openly compete with the other major companies in the field and the company has been making acquisitions.

This is a heated topic, that is for sure. It comes down to one's stance and opinion of the world. Wall Street has been force feeding the idea of separations to conglomerates (somewhat jokingly, just for the investment banking fees) to 'focus on core operations.' If companies divest too much they may end up just being smaller and more vulnerable without their old safety nets. No pun intended, but time and the markets will determine the outcome here.