AOL dismantled?

The Brisitsh press launched rumors of AOL selling its European branch. The rumor is not really new, but some new information makes it more credible. The Citigroup bank should have been mandated to sell the French and German subsidiaries. AOL is a loss-maker unit inside Time Warner and continues to loose subscribers (loss of 835k subs. in 1Q06) and revenues (-7%) in spite of ad revenues climbing 26%. In addition, AOL has to pay $2.6bn to shareholders following irregularities in the AOL- Time Warner merger. So the sale could partially help facing short-term financial problems. French and German units are together evaluated at about $850m. This sale, however, does not match with current AOL strategy to launch LLU, new portals and new services (a free phone number for AOL Instant Messaging subscriber), in most European countries. Simultaneously, AOL is reshaping its US operations, laying off some 1300 employees and closing its call center in Jacksonville, Florida.

Wait and see!