Time for change at Time Warner
Time Warner (TWX) shares rose 4% after CEO Jeff Bewkes said the media company and publisher of Fortune wants to cut costs. Bewkes pledged to cut corporate-level spending by 15% in a move that will save $50 million, and he suggested more expenses will come under the knife later. “We’ve already saved about $1.5 billion in expenses over the past two years,” he said in an e-mail to employees. “But cost management has to be a continual process and mindset at every level of our company.”
Bewkes also said Time Warner will consider reducing its 84% stake in Time Warner Cable (TWC), and that it plans to separate AOL’s growing advertising business from its online access operation - which has been de-emphasized following a sharp, multiyear decline in subscribers. Bewkes said the separation should “give AOL greater strategic flexibility in the future” - a nod to the notion that AOL could be of greater value to other players in the Internet ad market in the light of Microsoft’s (MSFT) bid for Yahoo (YHOO).
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