Not long after Clearwire announced their intent to begin lighting up a 4G LTE network, Sprint and a cabal of cable companies have begun to discuss the idea of a possible Clearwire acquisition.

Last we heard, Clearwire was waiting on $600 million in additional funding before any work on their LTE rollout could begin. Comcast, Time Warner, and Bright House are currently in talks with the nation’s third-largest wireless provider to get Clearwire the necessary funds to build out their LTE network.

Traction for Clearwire’s current WiMax offerings have slowed down considerably — no new WiMax markets have bee lit up this year — and Verizon’s 4G network is now said to cover half of the country’s citizenry. It would appear that the tacit agreement among Sprint and Co. is that LTE is crucial to competing in the mobile space.

What’s still up in the air are the exact mechanics of this investment. BusinessWire runs though a few possibilities: the companies in question could take the direct approach and buy out Clearwire completely, while another option has the cable companies investing through Sprint. Regardless of the process, if the deal goes through, it could be a win-win for all concerned parties.

Thanks to funding from the cable companies, Sprint gets access to a more competitve 4G network which should allow it to stand on firmer footing in comparison to rivals Verizon and AT&T. With Verizon moving at full steam with LTE and AT&T poised use T-Mobile to expand its reach, Sprint needs LTE just to stay relevant.

Sprint’s stance on wholesalers would benefit cable companies in the event Sprint ends up acquiring Clearwire: while Comcast and Time Warner already resell WiMax equipment from Clearwire under their own banners, Sprint’s wholesale agreements would allow cable companies to continue doing so albeit with the latest and greatest in network tech. The bottom line: more money in everyone’s coffers.

The deal isn’t yet official, but considering what it could mean for everyone involved, expect to hear about some serious negotiations in coming weeks.

Time Warner Cable this morning announced that it will acquire cable systems serving approximately 70,000 basic video subscribers, 42,000 HSD subscribers, and 26,000 phone subscribers in Kentucky and Tennessee from NewWave Communications for $260 million in cash.

NewWave had been buying up many of these cable systems, some property acquisitions dating back to 2003. The company says it will now concentrate on “ongoing operations in other service areas”.

The transaction is subject to customary conditions, including FCC and antitrust approval, and is expected to close during the fourth quarter of 2011.

BlackArrow, a provider of advertising solutions for ‘New Television platforms’, this morning announced a strategic investment by Time Warner Cable. Joan Gillman, president of media sales for TWC, has been named to the BlackArrow board of directors.

The cable system operator joins BlackArrow’s impressive list of backers, which includes Cisco, Comcast, Intel Capital, Mayfield Fund, Motorola Mobility, NDS and Polaris Venture Partners.

The Time Warner Cable investment and the Motorola Mobility investment from last November complete BlackArrow’s previously announced Series C funding – bringing the total amount raised in the round from $20 million to $27 million.

BlackArrow says the Time Warner capital will be used for the deployment of its Advanced Advertising System to programmers and New TV content distributors.

The system is designed specifically for the technological complexities and business issues within on-demand television advertising environments.

Time Warner will have to stop using the words “fiber optic” to describe its broadband network. Verizon, whose Fios service is a bona fide fiber-to-the-home (FTTH) service, took issue with some of Time Warner’s advertising, complained to the relevant board, and walked away with a favorable ruling. Done and done.

Recent Time Warner advertisements used stirring language along the lines of: our “advanced fiber optic network delivers the future to you… for less.”

The future, Conan?

The problem with that language is that while some of Time Warner’s broadband infrastructure is, indeed, fiber optic, the so-called “last mile” is plain ol’ coaxial cable. Compare that to Verizon and its Fios service, which is fiber optic from soup to nuts.

Bottom line is, Verizon complained to National Advertising Review Board, the board agreed with its complaint, and then told Time Warner to change the wording. Time Warner, having “exhausted its appeals,” will now update its advertising to reflect the fact that it’s not a true fiber-to-the-home situation.

NaviSite provides companies with enterprise hosting capabilities, application management and cloud services. These include email and collaboration hosting for IBM Lotus and Domino; Microsoft Exchange and SharePoint; software QA and testing, server and storage management, data protection and more. The company brought in $126 million in revenue for its fiscal year 2010 and had approximately 1,400 customers using its services.

The company currently operates ten data centers in the United States and the United Kingdom, including two SAS 70 Type II certified data centers, and network operations centers in Gurgaon, India and Andover, Massachusetts.

According to the release, NaviSite’s services will be offered to Time Warner Cable’s commercial services business customers. Time Warner CEO Glenn Britt says in a statement, “NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities. We expect to build upon NaviSite’s successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses.”

NaviSite recently sold its Dallas colocation business to Cologix in December.

TimeWarner CEO Jeff Bewkes haughty dismissal of Netflix is still reverberating through the tech world, dominating Holiday party chatter and jokes around the metaphorical water cooler. (At least the nerdy parties I go to.)

This would be Netflix, the company that already makes up 20% of peak Internet broadband. Netflix, the company that helped kill Blockbuster and the DVD purchase market. Netflix, the company that shrugged when Hollywood refused to cut them deals, bought DVDs wholesale and still won. Netflix the company led by Fortune’s top businessperson of the year Reed Hastings.

Techies I’ve spoken with aren’t so much offended as much as they are confused. Really, Bewkes, you think Netflix is done? Is it April Fool’s Day already?

Joining me to discuss why Netflix pulled off the seemingly impossible — building a subscription digital media company the world increasingly can’t live without — and why it will continue to is David Pakman of Venrock who has been around the digital music block and has a few words for Mr. Bewkes. Video below.

Today I got to see Time Warner’s Signature Home $200 a month service package offerings up close and personal at a loft they rented in fancy-pants Soho. The offering, which is comparable to their triple-play program except that you get 24/7 customer service including concierge-style phone service and installation techs who will spend up to three hours at your home setting up all your junk. They even wear little booties so they don’t scratch up your imported zebra-wood and elephant ivory parquet floors.

To be fair, you do get two 500GB DVRs as well as a digital VOIP service with included caller ID that will AIM when you get a call. You can also control the DVRs over the Internet and iPad and iPhone apps are forthcoming. Finally, you get “wideband” Internet through DOCSIS 3.0-tier networking with 50Mbps down and 5Mbps up, an improvment from their current real-world service of about 1Mbps down and “Why Don’t You Send a Letter In The Mail, It Will Get There Faster”Mbps up.

The service is currently unavailable in Dallas and LA while their “wideband” service is available in small cities throughout the US. Until it rolls out in your nabe, friends, you’re going to have to depend on their current, non-SignatureHome techs scuffing up your linoleum.

We talked to Sam Howe, CMO, about the installs as well as the future of 3D on cable.

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Time Warner is turning on more channels for its TV Everywhere strategy. Once again, Verizon FIOS customers will be the first to get the channels available on their laptops, and soon on their mobile phones. The two companies announced today that starting in June, FIOS TV subscribers will get unlimited online access to popular shows from Time Warner’s TNT and and TBS channels.

It won’t be the complete lineup, but rather will work along the same lines as EPIX and HBO Go (which is a dedicated site for HBO subscribers with a limited selection of HBO shows and movies). Not everything will be on there, but it will be more than what is on Hulu or the rest of the Web right now. It will stream full-length shows like The Closer and be available only to paying TV subscribers.

Both TNT and TBS will launch dedicated Websites alongteh HBO Go model, and the shows will also be available on FOIS TV Online. Verizon is working with other channels to add to its TV Everywhere lineup, including FOX News, CBS, MTV Networks, Hallmark Channel, Smithsonian Channel, and the Tennis Channel.

Print publishers are in a tizzy over Apple’s new iPad because they hope to finally be able to charge for their digital editions. But in order to get people to pay for their magazine and newspaper apps, they are going to have to offer something different that readers cannot get at the newsstand or on the open Web. We’ve already seen plenty of prototypes from magazine publishers which include interactive graphics, photo slide shows, and embedded videos.

But what should a magazine cover look like on the iPad? After all, the cover is still the gateway to the magazine. Theoretically, it will still be the first page people see, giving them hints of what’s inside and enticing them to dive into the issue. One way these covers could change is that instead of simply repurposing the static photographs from the print edition, the background image itself could be some sort of video loop. Jesse Rosten, a photographer in California, created the video mockup below of what a cover of Sunset Magazine might look like on the iPad (see video below).

The video shows ocean waves gently lapping a beach as the title of the magazine and other typographical elements appear on the page almost like movie credits. He points out that these kinds of videos will have to be shot in a vertical orientation rather than a horizontal landscape one. This is just a mockup Rosten came up with on his own, but the designers of these new magazine apps should take note. The only way people are going to pay for these apps is if they create new experiences for readers.

Today HBO announced it will be making its movies and TV Shows available on the Web to subscribers through HBO Go, which up until now has been in private beta. HBO Go is part of the cable industry’s TV Everywhere strategy to make TV content available online to paying subscribers. It contains 600 hours of movies and TV shows which can be streamed live and even in HD. HBO Go is available first to Verizon FIOS subscribers. Since I am a Verizon FIOS customer, I logged into HBO Go this morning and checked it out. (Despite reports elsewhere that it won’t be available until Thursday, it is in fact now live). Below are my initial impressions and screenshots.

The videos play decently and you can watch in HD, but if I wasn’t already paying for HBO I certainly wouldn’t pay for access to this site. The choice of shows and movies is just not that great. You can watch every episode of The Wire, and the final season of The Sopranos, but not one episode of Curb Your Enthusiasm. You get a lot more in your cable subscription, especially if you get multiple HBO channels. The on-demand option is great, but essentially HBO Go is competing with much broader array of choices on the TV which can also be made on-demand through a DVR. There are some movies like The Watchmen and Taken, which I think I’ve already seen three times each this month on TV, and a spattering of older archived movies like Canadian Bacon, but for the most part the selection is worse than what you get on Netflix via its streaming option. I’m not sure I want to see The Chumscrubber in HD.

The site itself is well-designed, image heavy with lots of entry points. You are greeted with a slideshow view of ten shows and movies on heavy rotation, including the movie Taken, HBO Series Big Love and The Wire, and a Dennis Miller special. If you have HBO, you can’t really avoid any of these shows, so nothing special there except that you can stream it anywhere on your laptop. Tabs across the top allow you to explore deeper into movies, series, comedy, sports, documentaries, and “late night” (aka, HBO’s hard-hitting sex documentary series like Real Sex). Everything is done in Flash, which makes it a beautiful experience, but it won’t be accessible on an iPad or iPhone without converting the site into an app

For each series, you can choose any episode for at least one season, but some shows are missing. You can also create a watchlist to watch shows later. When I was clicking through the site, the streaming quality was great, but when I tried to switch to another show or movie the audio to Canadian Bacon kept playing in the background (which isn’t necessarily a bad thing—I love that movie).

My main issue with HBO Go is not the fact that it is behind a paywall (after all, that is HBO’s business even on TV) or the site’s look and feel. The site’s navigation is clean, everything is easy to find, and the playback looks great. And moving part of its video library online is a smart move for HBO. My issue is with the selection. It’s not just that 600 hours of rotating shows and movies is just a fraction of what HBO shows on TV in any given month. Managing 600 hours of on-demand video is resource intensive, so HBO has to set some limit. HBO is not Web video company. But Hulu or even Verizon could manage a bigger catalog, and even keep the paywall.

TV is moving online, as this first step by HBO illustrates. But ultimately, I want all the channels I get through Verizon to be available for searching, managing, and video streaming on the Web. Verizon FIOS already lets me program my home DVR from the Web, but I can only watch those shows on my TV. There is still a disconnect between my computer and my TV, and that is frustrating. And yes, I want it all because I am already paying for it.

Editor’s note: This guest post is by Andrew Keen, the author of Cult of the Amateur and an advisor to Arts and Labs, a collaboration between entertainment companies, software providers, telecommunications providers, artists and creators.

Some people don’t like TV Everywhere, Comcast’s and Time Warner’s plan to bring cable TV to the Web.  They are just paranoid.

Allow me to explain. In his 1964 Harper’s Magazine essay “The Paranoid Style in American Politics”, Columbia University historian Richard Hofstadter argued that American politics has often been a stage for excessively conspiratorial and suspicious minds from both the left and the right. What disturbed Hofstadter most of all was the sanity of the paranoid. “It is the use of paranoid modes of expression by more or less normal people that make the phenomenon significant,” he explained. By infecting normal people, Hoftstadter worried, the paranoid style had made conspiratorial fantasy a troublingly recurrent feature of American political culture.

Hofstadter is correct. From Andrew Jackson to Joseph McCarthy to contemporary Americans on both the left and the right, the paranoid style—with its obsessive targeting of the Roman Papacy or Russian communists or Wall Street bankers or Muslim terrorists—has replaced rational discussion with what Hoftstadter called “heated exaggeration, suspiciousness and conspiratorial fantasy.”

As the Internet has become more and more of a central political issue in American life, so the paranoid style has, unfortunately, begun to infect our public discussion about technology and media. Much of this paranoia focuses on the supposed selfishly monopolistic intentions of mainstream media which, for many otherwise sane people, represents a deadly threat against the so-called “people’s Internet”. Thus, from Rupert Murdoch’s obstinate determination to protect the economic value of his content on the Internet to Bono’s latest defense of intellectual property to the perpetual hysteria around the Network Neutrality debate, any criticism of piracy or defense of paid content is viewed in the darkest and most apocalyptical terms by paranoid advocates of an “open” and “free” Internet.

Richard Hoftstadter’s “angry minds” who, in the 19th century, obsessed over the threat of masons, Jesuits and munitions makers, have, in the digital 21st century, discovered record labels, movie studios and, above all, telecoms and cable companies as the root of all our problems. Take, for example, the paranoia that has greeted Comcast and Time Warner’s announcement of their TV Everywhere pilot. On the face of it, the non-exclusive TV Everywhere service is a perfectly rational and reasonable effort by the cable companies to combine the values of their offline and online businesses. The test scheme – which is about to be rolled out to 5,000 Comcast customers – enables subscribers to access content from Time Warner’s TBS and TNT channels which they’ve paid for on their cable boxes for free on the Internet.

So what’s not to like about TV Everywhere? If you choose to pay for cable service, then you’ll be able to access this content for free on the Internet. If not, then you won’t. And if current cable subscribers object for any reason to the TV Everywhere scheme, then they can simply end their commercial relationship with Comcast and go elsewhere to acquire their media.

But TV Everywhere has been greeted with exaggerated suspiciousness and conspiratorial fantasy by some Internet groups. This paranoia is particularly palpable at lobbying groups like Free Press and Public Knowledge—organizations which often appear to be intrinsically opposed to the online business initiatives of large, established media companies.

For example, Josh Silver, Executive Director of Free Press, has argued that TV Everywhere is really a “desperate bid by old media giants to crush the emerging market for online TV.” And here’s the paranoid language with which Marvin Ammori, senior adviser at Free Press, characterized TV Everywhere:

The launch of the TV Everywhere model indicates that Comcast wants competition nowhere. These are transparent efforts to preserve the cable cartel that gouges consumers. Comcast wants to be the gatekeeper to the video programming world. This service is a threat to innovative online video and an attempt by the industry to impose the cable-TV model onto the Internet.

Well of course Comcast —a part of this supposedly evil “cable cartel that gouges consumers” —wants to be the gatekeeper to the video programming world. That’s their business model, their very raison d’etre. But the idea that TV Everywhere could be a threat to “innovative” video start-ups like Vuze, Roku and Hulu is an example of the kind of paranoia about large media companies that has infected groups like Free Press and Public Knowledge. Content businesses such as TNT, TBS and CBS are free to run their content on both TV Everywhere and ad-supported free websites like Hulu. It’s their choice. And that choice—as all commercial decisions—will presumably be determined by solid business criteria. If Hulu or TV Everywhere makes sense in commercial terms, then content producers will allow their content to run on these networks. If not, then they won’t.

“If Comcast is not attempting to stifle competition, then why is it only available to Comcast cable subscribers and not nationwide for all Internet users?” Ammori goes on to ask about TV Everywhere.

But why would Comcast make its content available for non-subscribers who haven’t paid to access this content? Does Ammori imagine that this multi-million dollar business initiative is really a charity intent on the public good? TV Everywhere shouldn’t be confused with TV For Everyone. If you don’t pay, you don’t play. Like it or not, that basic economic truth applies to both new and old media.

Not all truths, however, should be applied in exactly the same way in both old and new media. In contrast with traditional media, on the Internet the more empowered consumer has become comfortable with picking and choosing the content for which they pay. Thus the success of iTunes over the Rhapsody model. So the really interesting business question which TV Everywhere raises is whether the old media model of bundling all-you-can-eat content in a single monthly price can work in the digital age of this empowered consumer. Perhaps, in parallel with TV Everywhere, cable companies would be wise to also offer the option of paying for online video content on an a lá carte basis.  But that is a different discussion.

Beyond all the paranoia, TV Everywhere is actually good for consumers who choose to legally access high quality video content on the Internet. The paranoid camp would, of course, disagree. “Under the TV Everywhere plan, no other program distributors would be able to emerge, and no consumers will be able to ‘cut the cord’ because they find what they want online,” Gigi Sohn, Public Knowledge president argued last year.

But Sohn’s pessimism about technological innovation is misguided. TV Everywhere is good news for program distributors because it opens up a potentially huge online channel for new content that wasn’t previously legally available on the Web. The more consumers who watch commercially viable video on the Internet, the more opportunities will exist for innovative online entrepreneurs. TV Everywhere represents one of the most promising business initiatives for bridging old and new media. By putting some of their most valuable content on the Internet, Comcast and Time Warner are doing all non-paranoid consumers and entrepreneurs a huge favor.

Photo credit: Flickr/Photomish Dan

It has all the makings of a drama that no one could possibly care about: a giant corporation looking to make even more money than it already does; an even bigger corporation looking to stand firm and not be bullied into making any decision against its will; helpless consumers with no one to turn to, no altar to pray at; and the Internet. If you’re a Time Warner subscriber you may loose all Fox-owned stations on Friday if certain conditions aren’t meant, namely that Time Warner send Fox (News Corp.) several large sacks of money.

So the story is that Fox, hurting because ad dollars have collapsed for whatever reason, wants to bilk Time Warner for $1 per subscriber for the right, nay, the privilege to carry its stations. These stations include your local Fox affiliate, My Network TV, FX, and all those Fox Sports channels. If Time Warner refuses to pay, and there’s no indication that it will, Fox will yank those channels off all Time Warner cable systems. The biggest markets this would affect include New York, Los Angeles, and Dallas.

Just think: a world (well, a few television markets) without American Idol, WWE Smackdown, and the Fox Soccer Report. Oh, and no National Football League—that’s the sport with the funny shaped “ball,” right? Soccer > Rugby > NFL. Fact.

Chaos! Fire in the streets! Cats chasing dogs! Et cetera!

The reason for this pointless game of brinkmanship between the two corporations is that Fox (and the rest of the TV networks for that matter) is hurting for money, primarily because TV ad rates have hit rock bottom. Advertisers will claim that TV networks today don’t have the same reach that they once did, be that because of people skipping commercials with their DVR, people using Hulu (and its slightly less legal cousins) rather than plopping in front of the idiot box (when was the last time the term “idiot box” was used, by the way?), or people just giving up on the medium altogether. (For me, like many of you I’d imagine, TV is only useful for live sporting events, and even that may not last long what with live streams and whatnot.)

Apparently Fox has been running crawls along the bottom of its programming saying, “If you want to keep this channel, go bitch at Time Warner,” not saying that Fox is demanding more money for, let’s face it, the same low rent nonsense they’ve been feeding America for many, many years now, the TV show “24″ notwithstanding. That show is great; I download it every week.

Update: Watch the demo videos.

The magazine business is hurting just like all print publications. And even if their Websites are popular, they generate one tenth the ad revenue of the print side. Since last summer, Time Inc has been working on a “Manhattan Project” to create a digital magazine for the new breed of color tablet computers soon to come to market. (Condé Nast is also working on a similar concept). Today, I got a sneak peak at a demo of the tablet magazine designed for Sports Illustrated.

The demo was shown on an HP table computer with a touchscreen, but it could easily be ported to an iPhone or an Apple iTablet, whenever that becomes available. The idea is to create something so beautiful and fluid that readers will actually want to pay for it. The cover takes up the full screen and you tap it to show a table of contents with thumbnails of the actual layout, which you can rearrange to read in any order you like. To flip through the pages you swipe with two fingers, and you can also tap to get a navigational timeline at the bottom. There is also a navigation wheel which lets you share stories via email, Facebook, or Twitter, favorite a story, go to related videos or photos interviews, other articles, or stats such as live scores.

The tablet format is much easier on the eyes than reading the same story on the Web, and you get the added bonus of full-screen slide shows or videos. You can also flip through photos within the text, while continuing to read. Sports scores and other data can be dynamically updated from the Web, or you can share stories and photos via email, Facebook, or Twitter.

The concept was designed by David Link at the Wonderfactory, and it’s all done in Adobe AIR. If I still read magazines, I’d much rather consume them in this form than on paper. My one criticism is that there weren’t any links in the text I saw in the demo, but there is nothing stopping Time Inc editors from putting them in and there are ways to access data from the Web and push out content to it as well. So it is not exactly a glorified CD-ROM, but adding more links would breathe some life into it.

Terry McDonell, the editor of Sports Illustrated who showed me the demo, thinks that readers will be willing to actually pay for a digital version contained within a tablet. That remains to be seen. Josh Quittner, an editor at Time (and my former boss) who spearheaded the task force behind the digital magazine thinks of it as an app. If people are willing to pay for apps on the iPhone, why not deliver magazines as apps also? He’s the one who calls it Time Inc’s Manhattan Project. Hail Mary might be a better name.

Anyway, there was still one pending suit out of the hundreds that were filed after the multi-billion dollar merger, and now it has been dismissed as well. The end of an era, of sorts.

A federal judge has thrown out the last of the Mohicans lawsuits, granting Ernst & Young’s motion to dismiss shareholder Dominic Amorosa’s complaint alleging it had failed to link the auditor’s statements to investor losses. U.S. District Judge Colleen McMahon of the Southern District of New York dismissed the private investor’s case earlier this week, saying the E&Y was not the cause for any of the man’s losses.

Amorosa, an AOL shareholder who voted in favor of the merger with Time Warner and exchanged his stock at a one-to-one ratio for stock in the combined entity, filed his suit in May 2003 as the last in a wave of lawsuits that followed media reports of widespread fraud at AOL and its successor corporation.

Aside from Ernst & Young, the suit named AOL, Time Warner, the merged company, Bertelsmann AG and 11 individual executives, but all of those defendants had previously been dismissed from the case in earlier proceedings.

(Source: Law360)

It’s been a long decade, but AOL will once again be an independently traded company on December 9, when Time Warner will spin off shares. Every Time Warner shareholder (disclosure: including me, from when I was employed there) will receive shares in AOL using the following formula: one share of AOL will be distributed for every 11 shares held in Time Warner.

In other words, we finally have an approximate market capitalization for AOL. The business will be valued at 1/11th 1/12th the value of Time Warner. At today’s market cap of $37.8 billion for Time Warner, based on a closing price of $32, that implies a $3.4 $3.15 billion market cap for AOL. Unless Time Warner shares surge over the next few weeks, it will be in that ballpark. Update: My initial math was slightly off. As some commenters point out, the implied value is 1/12th of Time Warner since at the time of the distribution everyone with 11 shares will receive an additional share. SInce we know how much Time Warner is worth, it is possible to come up with an implied value for AOL based on that ratio, even though that value will change the minute the shares start trading.

So the AOL business which was valued at $5.7 billion just last July when Google sold back its 5 percent stake, is now worth even less—not to mention the initial $20 billion valuation when Google first invested in 2005 or, going back even further, the original $109 billion merger with Time Warner way back in 2000.

But let’s forget about all that. Onwards and upwards. With a little cost-cutting, those AOL shares will shine. Right?

The Armstrong talk can be summarized pretty easily: Content, content, content. Armstrong made it very clear that not only is AOL in the process of spinning off into its own public company, but that they are now going to be a content company. In fact, they’ve gone from 500 journalists to over 3,000 since he took over, he said. And that will keep growing.

The idea is to grow AOL’s unique visitors and then figure out the best way to monetize it. But again, growth, will be the key. He’s not sure if 2010 will see that significant growth, but after that, he expects they’ll be going in the right way.

Notably, Armstrong also hinted at some new technology that AOL has been working on for the past 3 months now. When pressed, he would not say what it is, but said that they will be talking about it at a later date. Mysterious.

Armstrong says he took the AOL job partially because it was a risk. And he noted that if you’re not working in the Internet industry to take risks, you shouldn’t be in it. “If you’re not failing, you’re not trying hard enough,” he said.

Below find the full Q&A (paraphrased):

JB: You and Sergey dress a bit differently.

TA: This is his tie (laughs).

JB: Why take the AOL CEO job? You had other options, like a sandy beach.

TA: I wasn’t thinking about leaving (Google) but the AOL thing came up. I’m a big believer that this is just the beginning for the Internet. AOL has a lot of things that people don’t realize. It’s undervalued. Google was a great experience, but I wanted to learn again. I have on this job in the first 6 months already. And the company was ready to change.

JB: Would you have taken the job if you knew you couldn’t spin it out from Time Warner?

TA: That’s not true. But it does make sense to spin it out.

JB: It hasn’t happened but it will right?

TA: Yeah that’s the intention.

JB: How does one do that? Take it public, private?

TA: If you own Time Warner stock, you will get a share of whatever AOL is. It’s like the Time Warner cable offering. So you can buy a share of AOL too soon.

JB: Is the company ready for that?

TA: Everyone has worked really hard. Still more work to do. We need to prepare to go public, so we have to do investor relations and taxes, etc. We’re in a good position, working towards it.

JB: How profitability and rev growth?

TA: Well that’s the tricky part. (laughs) The company is very profitable. Most of it is paid services, very small is from dial-up. We’re very focused in growing a large platform around content now. That’s the hard work to get down. The rev 2010 for us will see the content coming up.

JB: Lot of AOL brands now, TMZ, women’s brands, etc. Will this be more of that?

TA: We have some secret sauce that I can’t announce. But we’ve been working on something for 3 months that’s a big tech shift. I can talk about it later.

JB: Wait, tell me more. What tech?

TA: It’s a broader platform with more information about content, and around content. I can’t give you a better answer. We’ve gone from 500 journalists to over 3,000. We’re going to keep growing. Our content is 80% our own, we’re going to keep going. It’s all about taking content management serious. There’s an opportunity there.

JB: Will AOL start acquiring again?

TA: Yeah the AOL/Yahoo deal that almost happened really set us back. Now we’ve flipped it, we’re not living in fear. We will acquire other companies again. I’m not sure who yet. Our money is going to the product right now, period.

JB: Talk to me about Twitter, all we’ve heard the past few days. Do you want to integrate Twitter?

TA: Yeah we’re interested in bringing in stuff like that. We have lifestreaming now, we do see that as a part of our future. Brad Garlinghouse’s mandate is ‘how do we take messaging to the next level?’ I’m a bit fan of Twitter, they’ve made it impactful. We’d be happy to use it in some way.

JB: What about Bing?

TA: I think they did a good job with Bing. They’re getting worthy attention. I was surprised.

JB: Can content-bases strategies scale? Content businesses don’t seem to get all the love that tech companies do.

TA: I don’t know what our valuation will be but people in the media business look at Silicon Valley companies with envy. We have the opposite view. Let’s take some tech and be serious about it, around our content.

JB: But how do you scale?

TA: I can’t tell you that! (Yet) I’ll use the television example. When you see the TV channels, look at the depth of content with 300 channels. It could be better. The distribution has massively changed with the Internet.

JB: The deal with Google, let’s talk about that. Is Google going to get a new search deal with you?

TA: AOL is not in the search business. We’re not in a rush to get a new deal done. We’re patiently working to get something done. Google has been a great partner. Google has a leg up on the relationship side, but in my AOL hat I need to make sure we get the right deal.

JB: What about Yahoo not being a search company anymore, like what AOL did a while ago? Did you agree with Sergey that Yahoo should have stayed going it alone?

TA: No, but I wasn’t as concerned as he was about it. Yahoo had to do what it had to do. It’s a tough market. Did I think we’d be major search partners with Yahoo? No. Now they’re getting out.

JB: What are the metrics how you judge where you are now and down the road?

TA: When I got there, pageviews were the main metric. I still am looking at that, more uniques, etc. We need to get to new areas of innovation too. Looking at user interest, etc. It may be tough in 2010, but post 2010, how do we get shareholder value? I think it comes from consumer value. I want to see large growth. Then we’ll figure out how to monetize those.

JB: What are they now?

TA: 270 million globally, 100 million in the U.S. but we’re changing things (unique visitors). 2010 should start showing things, but we may drop a bit at first, then we should see growth after that.

Audience Q&A

Q: What’s the vision for Patch? And what about Yellowpage revenue?

TA: Patch is in about 10 towns, it’s being tested. We’re trying to digitize towns. But all that town’s information online. The vision is that this is a business, but this could be good for the world. This is a core area we can innovate in. We’re excited about that area.

I think in the future the Yellowpage business will be much, much better than it is today. A lot of companies out there are working on it. And Patch will help.

Q: Talk about email and ICQ.

TA: We’ve have: content, ads, and communications. What you’re talking about is the last bucket. People ask why isn’t AIM a billion dollar business? For us, that’s about the community.

Q: 500 to 3,000 journalists? Holy cow, how’d you do that?

TA: Mainly it’s been hiring and getting free-lance people on payroll. We have come up with a content strategy that fragmentation is our friend. We started to quickly add content when we see successful ideas. We’re doing over 3,000 pieces of content a day online, and much more than that soon. We’re also now doing 3-4 times the amount of video we were doing a few months ago. This is a way for us to build a community. We’ve been hiring big names from ESPN and WSJ. For journalism, you’re not just hiring the person, you’re hiring their community too.

Q: What about using new devices?

TA: There’s some interesting stuff from a device perspective. But we’re just thinking about the users now, no matter what they use. Mobile will be even more important in the future. I’m agnostic towards the devices though.

Q: So will mobile be it’s own interface?

TA: I don’t know.

JB: What about Google going into content?

TA: I know Google gets criticized a lot for going into new areas, but they keep ahead of the curves. They’re very good at that. It makes sense to test things, even if they don’t work out. It’s more than just sitting around the room and thinking about it. “If you’re not failing, you’re not trying hard enough.” AOL used to take no risks, now we’re changing that.

Bebo is a great product, we’ve pulled it back out and are trying to do it as its own product again. Shame on us for trying to integrate it to all this other stuff. I came to AOL because it’s a risk. If you’re not ready for that, the Internet isn’t for you.

That’s a wrap.

At the same time, we’re continuing the reshaping of Time Warner that we started last year. We’re on track to spin off AOL to our stockholders around the end of the year. Separating AOL will benefit both companies – enabling Time Warner to concentrate fully on our core content businesses and improving AOL’s operational and strategic flexibility.

That’s three AOL mentions in three sentences. Clearly, Time Warner is happy to let everyone know that it will only have a couple more quarters of dealing with that division’s nosedive.

How bad was AOL this quarter? Revenues dropped 24%, to $804 million, versus the year-ago period. The service saw a 21% decrease in advertising revenues, attributable to both display and search ads on its own sites, as well as on third-party sites using its platform.

And the loss of dial-up subscribers continues to hurt the company. It lost over a half million in this past quarter, and some 2.3 million from the year-ago period. Revenues from subscriptions declined 27% from the year-ago period.

In preparation for the AOL spin-off, Google recently sold back its 5% stake in the company, at a $700 million discount from its initial $1 billion investment. However, thanks to the search deal over these past several years, it looks as if Google was much closer to break-even on the deal.

And while AOL’s numbers were awful, Time Warner’s print and film divisions hardly fared better. The print division headed up by Time, saw a 26% decrease in ad revenue from the year-ago period, and an 18% decrease in subscription revenue.

Meanwhile, the film division was hurt by the slide in DVD sales. While movies like The Hangover exceeded expectations at the box office, those profits were wiped out by DVD numbers being down across the board.

Highlighting The Hangover in the results is interesting. One could say Time Warner’s experience with AOL these past several years after the $164 billion mega (or perhaps “drunken”) merger in 2001 (remember, it was AOL that actually bought Time Warner at the time), has been similar to The Hangover. Based on the repurchasing price Time Warner paid for Google’s AOL stock, AOL is now worth less than $6 billion.

You can’t blame the cable operators for their plans. They have to pay good money for access to cable stations. Then they, of course, pass along the cost to subs via a monthly bill. The thought is that those people that pay for the content should be able to watch all of it on both their TVs and computers.

Of course the other side is that if you don’t pay for those services, then you’ll be shut out. This authentication system will be used initially on sites like Comcast’s video site, Fancast, but there is always the possibility that it could eventually make its way on to Hulu.

A lot of Hulu’s content comes from the major networks ABC, NBC, and Fox. (CBS doesn’t have any content on Hulu) This is not the programming that Comcast and Time Warner are bitching about. They are concerned about the cable channel’s programming like Comedy Central, FX, Sci-Fi and others. TV Everywhere tackles this problem by placing content from similar, and even more, stations behind the closed walls of an authentication system at Fancast.com.

Comcast’s own video site, Fancast.com, is similar to Hulu in many ways. It offers a lot of the same programming and a similar, albeit not as nice, look. This is because it actually uses a lot of content from Hulu, but is going to be the launch pad for TV Everywhere.

The trial will include 5,000 Comcast subscribes starting sometime this summer. The test will focus primarily on this so-called authentication technology that’s designed to keep the freeloaders out. Not that many people will really care that much as the only premium content that Fancast is going to feature initially is coming from TBS and TNT. The plan is to eventually give access to even more premium content including movies for no additional cost to current Comcast subscribers.

The average consumer is probably content with Hulu’s offering. Many people have left cable companies entirely and supplement their OTA TV with Hulu. It’s great that Comcast wants to offer its customers more Internet video, but I don’t see how it will generate revenue for Comcast and Time Warner unless its adapted by sites like Hulu, forcing people back to the cable companies for their content.