The marriage between Time Warner Inc. (TWX), a global leader in media and entertainment businesses, and AOL Inc. (AOL), its web media unit, which took place in 2000, ended on Dec 9, 2009, when the former announced the completion of the spin-off of AOL. Time Warner investors will receive one AOL share for 11 Time Warner shares they own, and any fractional AOL shares will be compensated by a cash payment.

The owner of Timemagazine, Sports Illustrated and CNN, has structured the spin-off to qualify as a tax-free dividend to Time Warner shareholders. After seven months of preparation, AOL began trading independently on Dec 10, 2009 under the symbol ‘AOL’. AOL shares fell 0.6% to close at $23.52, whereas Time Warner shares climbed 4% to close at $30.45 on Thursday.

AOL had been striving to revamp itself to become an independent online company preparing to compete with Google Inc. (GOOG), Yahoo! Inc. (YHOO) and Microsoft Corporation (MSFT) in the U.S. market for online advertising valued at $29 billion. The company will now focus more on capturing online readership by increasing content offerings and providing an online advertising platform.

As a part of its restructuring program, AOL plans to lay off one-third of its staff or 2,500 employees to slash annual costs by $300 million, and is also evaluating options to shed some of its assets. AOL’s revenue dipped 23% to $777 million in third-quarter 2009 due to a 29% drop in subscription revenue, resulting from sustained subscriber losses and an 18% fall in advertising revenue.

AOL lost nearly 438,000 subscribers during the period. AOL owns and operates more than 80 branded and niche content sites, which include independent music site Spinner, sports site Fanhouse, Engadget for tech news, MapQuest site and social-networking service Bebo.

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