Worth $160 Billion Less; AOL.com Goes Back To The Future & Starts Trading All Over Again On December 10th

Earlier this year Time Warner, Inc. announced that it would be spinning AOL off back into a separate public company.

Today Time Warner announced that AOL will begin trading on December 10th, 2009.

It will mark the return to the stock market for AOL, which was bought by Time Warner about 9 years ago in what is largely regarded as being one of the most disastrous corporate mergers in history.

Time Warner shareholders of record on Nov. 27 will receive one share of AOL stock for every 11 shares of Time Warner common stock.

When AOL’s announced it plan to merge with Time Warner n January 2000, AOL was valued at $163 billion.

Based on today’s closing price of Time Warner’s stock of $32.35 and its 1.17 billion outstanding shares, AOL’s market cap would be around $3.44 billion.

Your reading it right.

$163 Billion to $3.44 billion in  less than a decade.

Ouch.

How important was this merger to Time Warner?

At the time of  acquisition Time Warner even renamed their company to AOL/Time Warner.

The merger between old media and new media never seemed to work.

AOL bleed subscribers and Time Warner could never figure out how to blend offline brands such a Time Magazine and Warner Brothers Studio with an internet service and content provider.

Back in July 2009, Time Warner bought the 5% of AOL that Google owned for $283 Million dollars.

Google originally bought its 5% share of AOL for over $1 Billion.

Now it looks like Google got a good price.

Based on today’s valuation, 5% of AOL would be worth only $172 Million.