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Posts Tagged ‘Time Warner’

AT&T completes 100-Gigabit Ethernet field trial using new Cisco gear, proves it does care

Remember those network investments that AT&T was talking up just days before Time Warner slipped over an offer for help? Looks as if the firm wasn’t kidding around, but there’s still nothing here that should get you excited about more available bandwidth in the coming days. Utilizing that fancy new Cisco router, the carrier recently completed a live network environmental trial of 100-Gigabit backbone network technology (far more hasty than that 40-Gigabit stuff that’s around today), but we’re told that the tech isn’t expected to be ready for “commercial deployment” until the “next few years.” ‘Course, we suspect we should be struck by the notion that the internet may actually have the proper infrastructure to keep on keepin’ on once Hulu really does take over the world, but for now, we’ll just have to extract a bit more joy from those vague “little things” in life.

AT&T completes 100-Gigabit Ethernet field trial using new Cisco gear, proves it does care originally appeared on Engadget on Thu, 11 Mar 2010 05:28:00 EST. Please see our terms for use of feeds.

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As AOL Heads For An IPO, It Leaves 2500 Employees Behind

AOL CEO Tim Armstrong this morning informed staff that the company will be looking for 2,500 people to voluntarily hand in their resignations, which would represent about one third of the company’s payroll.

The news comes a mere week after AOL, which is preparing to spin off Time Warner and go public, said it would be firing at least 1,000 employees and spend about $200 million cleaning house prior to the planned IPO.

The voluntary layoff program is to begin on December 4 and end after the spin-off date (December 9), and if not enough volunteers come forward the company says it will fire people on its own. AOL says the cuts will drop its annual operating expenses by $300 million, and that it will incur a $200 million charge from the time of the spin-off through the first half of 2010.

Update: Business Insider has the details of the lay-off package.

When AOL will be on its own again, it will be worth about $3.15 billion.

Worth noting: Armstrong says he has personally decided to forego his 2009 bonus (which was guaranteed to be in between $1.5 million and $4 million). This, in contrast to the decision to let 2,500 people go, is not to please the market pre-IPO, but more of a goodwill gesture to current employees.

From the SEC filing:

On November 19, 2009, AOL Inc. (the “Company”) informed its employees of proposed restructuring activities as part of its continuing cost reduction initiatives aimed at aligning the Company’s organizational structure and costs with its strategy (the “Restructuring”). The Restructuring is conditioned upon the successful completion of the Company’s previously announced spin-off from Time Warner Inc. (the “Spin-off”), as well as the approval of the Company’s new Board of Directors that will begin service in connection with the Spin-off. It is anticipated that, if approved, the Restructuring will include the reduction of approximately a third of the Company’s current employee base, which will be conducted on a voluntary and involuntary basis. The goal of the Restructuring is to reduce ongoing annual operating costs by approximately $300 million. If the Restructuring is approved, the Company expects to incur restructuring charges of up to $200 million, substantially all of which is expected to be incurred from the date of the Spin-off through the first half of 2010.

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When AOL Spins Off On December 9, It Will Be Worth About $3.4 Billion

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 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 billion market cap for AOL. Unless Time Warner shares surge over the next few weeks, it will be in that ballpark.

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?

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