Blogs are Stupid

NEW YORK, July 18 (Reuters) - Time Warner Inc.'s stock performance rests heavily on its prospects for America Online, the Internet unit that was once the scourge of the world's largest media company and is now seen as its saving grace.

As Wall Street expects Time Warner to post its weakest quarterly results of the year on Aug. 3, investors are eyeing salvation in AOL, which has revamped its site into an online advertising bonanza from a prior flagging subscription model.
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Still, some analysts remain skeptical.

"It's still not clear to me that the current strategy -- the fourth one in two years -- will work all that well," said veteran media expert Harold Vogel of Vogel Capital Management. "AOL has a tremendous battle on its hands with Yahoo, Microsoft and Google."

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For now, Time Warner, which has suffered a public lashing for holding onto AOL the last four years, remains the only major media company with anything resembling a coherent online strategy as big media companies snap up dotcoms again.

"If the relaunch fails to drive traffic/advertising gains, a spin-off of AOL appears likely," Jessica Reif Cohen, analyst at Merrill Lynch said in a report.