All Things Digital

The Googles of the world, they are the Custer of the modern world. We are the Sioux nation. They will lose this war if they go to war. The notion that the new kids on the block have taken over is a false notion.”

–Time Warner CEO Dick Parsons, May 9, 2007

Lousy historical analogies aside, Time Warner CEO Dick Parsons’s ill-conceived comment on the current media landscape was in some ways an apt one. After all, one could say that Time Warner has long been an organization with “too many chiefs and not enough Indians.” Too many working parts, too, according to some who’d like to see the company sell off a few, before Google and Co. commandeers its primary advertising supply and forces it onto a reservation on the south bank of the Missouri.

In a note to clients this morning, Pali Research analyst Richard Greenfield said that the time has come to break Time Warner apart. “It is time for the complexity of Time Warner to come to an end,” Greenfield wrote, suggesting the company consider divesting itself of ts publishing segment or AOL, which Greenfield describes as “unfixed.” “We believe the board and management have had long enough and must act over the next 12 months to radically reshape Time Warner–with its upcoming board (late July) likely to begin laying the groundwork for change,” he continued. “The synergy between Time Warner’s divisions is limited at best; sometimes even creating the risk of destroying value at one division to help another.”

Interesting, eh? Maybe Carl Icahn, the billionaire financier who unsuccessfully tried to force a breakup of Time Warner last year, didn’t misread shareholder sentiment so much as act on it prematurely. Makes you wonder what the topic of conversation was when Parsons and his top deputy, Jeff Bewkes, lunched with Yahoo chairman and former CEO Terry Semel at Allen & Co.’s Sun Valley media and technology conference last week.

Former AOL CEO Jonathan Miller did a lousy job of divining his future at the world’s largest Internet service provider, but he might not have been so bad at envisioning AOL’s. In October 2006, Miller intimated that Time Warner would consider divesting itself of the service provider. He was sacked a few weeks later.

Apparently, it wasn’t AOL’s future that was in doubt. At least at that particular moment. Because, as we all know, AOL’s future is always in doubt. Indeed, speaking at a Merrill Lynch media investor conference in London yesterday, Time Warner Chairman and CEO Dick Parsons said the company expects to make a decision on AOL’s fate before 2008. “By the end of this year we can make the call on AOL [on whether] we have found a business model or approach that can result in sustainable growth over time,” he told conference attendees.

Interesting, yeah? Parsons’s comment will no doubt fuel further speculation that the company might spin off a portion of AOL, as it did with Time Warner Cable, or merge it with another Internet property.

One last thing to leave you with here. Asked about Time Warner’s push into digital, Parsons said there’s a lot of work left to do to complete the transition to online. Then he offered this telling quote: “I’m going to say something I shouldn’t say. I worry about CNN more now than I do about CNN.com.”

Historical analogies sure are tricky, aren’t they? Just ask Time Warner CEO Dick Parsons, who ran afoul of one during a panel discussion at the National Cable & Telecommunications Association conference today. Commenting on the piracy issues facing traditional media in the digital age, Parsons compared the fight over copyright protections in the U.S. to the Battle of the Little Bighorn. “The Googles of the world are the Custers of the modern world, and we are the Sioux nation,” Parsons said. “At the end of the day, they lose this war if they go to war, and they know that.”

I don’t know, do they? I wouldn’t be so sure–not after their response to the Viacom suit. And more to the point, isn’t Parsons forgetting something? Like the deplorable fate of the Sioux Nation?