Investors don't know what to make of Time Warner Inc.'s (NYSE: TWX) results.

First, shares rose this morning as investors gave a thumbs up to Chief Executive Jeff Bewkes' plan to dispose of the media conglomerate's cable television business. Then, they fell after the earnings conference call. Perhaps investors were expecting news on a deal for AOL. Otherwise, the parent of CNN, Time magazine and Warner Brothers posted mediocre quarterly results (pdf).

"We've decided that a complete structural separation of Time Warner Cable Inc. (NYSE: TWC), under the right circumstances, is in the best interests of both companies' shareholders, Bewkes said in the earnings release. "We're working hard on an agreement with Time Warner Cable, which we expect to finalize soon."

Time Warner investors, who have seen the value of their stock fall by more than 25% over the past year, have long wanted the company to dispose of its cable business. Owning both content and distribution doesn't seem to make much sense anymore. The question is what the New York-based company will do with the money from the sale.

Paul Greene, media analyst with T. Rowe Price, told Bloomberg News that the content business is cheap without the cable business and "if they get cash from cable and use that to buy back shares of the parent company, that's very accretive."

The other big question mark hanging over the stock is AOL. During the quarter, revenue fell 23% to $1.1 billion as subscription revenue slumped as a result of the company's switch to an advertising-supported business model. Advertising revenue, though, rose only 1% amid a decline in display advertising. These results will heighten pressure on Bewkes to do something about the internet business -- a deal with Yahoo! Inc. (NASDAQ: YHOO) would be nice -- because it's just not growing as fast as Wall Street would like.

But as Bloomberg notes, the performance at AOL will improve: "In the remainder of 2008, AOL's ad sales will rise because of revenue from the Platform A network for buying and selling ads, Time Warner said in a regulatory filing today. Sales of so-called display ads shown on Web sites will fall in the current three months, partly because of `expected continued challenges of integrating recently acquired businesses."

This may be a case of too little too late.