Dick Parsons Flatlines (Dinosaur Media DeathWatch™ Special Edition)

Life for Richard Parsons at Time Warner is Sisyphean. No matter what he does, the stock stays just below $20, where it has been lodged for the four years he has headed the world's largest media company. The $20 billion stock buyback, the sale of flagging Warner Music, the proposed sale of 18 marginal magazines like Popular Science (the 18 make up one-eighth of the company's vaunted periodicals roster), the painful cost cuts and layoffs, the paring of huge debts run up from what's ritually called the "disastrous" 2000 merger with AOL: Nothing works for Time Warner (19, TWX).

Even an improved financial performance gets a shrug from Wall Street. Parsons has pulled Time Warner out of the red and, in 2006's first half, quintupled earnings to $2.5 billion on $21 billion in revenues. Fueling the profit growth is a surge in the cable division, now making great headway enlisting subscribers for its three-way offering of cable TV, phone and broadband. Satellite TV and phone companies have not emerged as the towering threats they were once forecast to be. To further strengthen cable, Parsons has bought assets from bankrupt Adelphia Communications, even though it has pushed debt up again.

All the while Parsons must deal with pressure from financier Carl Icahn, who has forced the company to do a large buyback of its shares, as well as boost the dividend and install more independent directors on the board. Another chorus of critics wants Time Warner to shed AOL.

But Edward Jones analyst Robin Diedrich thinks Parsons is on the right track and that the market will at long last see that. She is particularly encouraged by Parsons' moves with AOL, which has lagged behind Yahoo and Google, thanks to their emphasis on search-linked ads. Time Warner has announced that AOL will switch to free e-mail, search and messaging functions much like Yahoo and Google. And if that doesn't pan out, Diedrich says, Time Warner can always give in to the chorus and sell AOL. It has already unloaded the German operations on Telecom Italia. "This company is undervalued, even if you value AOL at zero, and that is what the market is doing at the moment," she says. At 17 times trailing earnings, Time Warner is affordable.

To: abb; PajamaTruthMafia; knews_hound; Grampa Dave; martin_fierro; Liz; norwaypinesavage; Mo1; onyx; ..

2 posted on 10/15/2006 12:30:25 PM PDT by Milhous (Twixt truth and madness lies but a sliver of a stream.)

3 posted on 10/15/2006 12:42:31 PM PDT by Milhous (Twixt truth and madness lies but a sliver of a stream.)

Nothing made me happier than ditching AOL last month when we were able to get broadband through our cable company. I have despised their anti-Bush news articles which greeted me daily when I logged on.

I don't see how converting to a free service will get them much revenue. We kept our old e-mail there, but I rarely check it, since it was full of spam. Anyone I want to hear from has my new address, so I won't be going there very often.

4 posted on 10/15/2006 12:44:43 PM PDT by Miss Marple (Lord, please look over Mozart Lover's and Jemian's sons and keep them strong.)

"... and that the market will at long last see that."

Perhaps. But the question is -- at how long last? How long will shareholders wait? How much down-sizing will TW be forced to do? The market doesn't wait forever, no matter how persistently pollyannas like Diedrich whistle past the graveyard.

"I don't see how converting to a free service will get them much revenue."

Last I heard, about one third of their accounts were free. My sister called them up to cancel and they offered her 3 months free so she could "reconsider." Three months after that, she repeated the same process with the same result. They were hoping to squeeze the competition this way. It didn't work.

"But Edward Jones analyst Robin Diedrich thinks Parsons is on the right track and that the market will at long last see that."

Yo, Robin, I have exclusive future rights to every toll bridge which goes into or out of San Francisco.

I figure that my new proposed company which hasn't been formed is worth at least 10 Billion $'s based on those exclusive rights.

Can you give me the same write up for Grampa Dave's Pie in the Toll Bridge Sky Company?

8 posted on 10/15/2006 4:44:50 PM PDT by Grampa Dave (There's a dwindling market for Marxist Homosexual Lunatic wet dreams posing as journalism)

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