Bewkes to pick up media giant's baton

Time Warner Inc's board on Monday elected Jeffrey Bewkes to succeed Richard Parsons as chief executive on January 1, stoking expectations that big changes lie ahead for the world's largest media company.

Bewkes, identified as the heir apparent since he became chief operating officer in 2005, will take the helm of Time Warner at a time when investors are demanding drastic measures to boost its sluggish share price.

Shares of the company, owner of top media brands including CNN, Time Inc, HBO and Warner Bros, have fallen 18 percent this year, taking it back to about the same levels as when Parsons took over the company five years ago. It has also underperformed rivals such as News Corp and Walt Disney Co.

Some investors say that Bewkes, who had been an outspoken critic of the AOL-Time Warner merger, should seriously consider spinning off part or all of the Internet division, or sell off some or all of its holdings in Time Warner Cable.

"I don't think there will be immediate impact to operations, although I do think that Jeff is less sentimental about the current structure of the company," Oppenheimer analyst Thomas Eagan said.

"Whether that means he is more willing to spin off or sell publishing, for example, I think it means that he will be more driven by the results than by strategy," Eagan said.

Bewkes, 55, said in a company statement announcing his appointment, "We have a lot to do, and I'm intensely focused on building shareholder value."

Time Warner said Parsons, 59, will remain chairman. The company's shares rose as much as 3.2 percent to $18.45, before ending the day down 0.4 percent at $17.81.

"His results-oriented management style and deep industry knowledge will be invaluable as he drives growth at Time Warner," Parsons said.

"Throughout his career, Jeff has demonstrated the capacity to generate industry-leading performances at our businesses, whether measured in terms of financial, operational or creative successes," said Parsons.

Gamco Investors Inc's Mario Gabelli, a Time Warner shareholder, expects Bewkes to look at strategy changes, such as a partnership between AOL and Yahoo Inc.

The once-mighty AOL online service has struggled to keep up with faster-moving Google Inc and Yahoo in recent years. AOL is expected to show another slow quarter of advertising sales when Time Warner reports results today.

'Something will occur'

"Clearly, something will occur," Gabelli said. "New CEOs all do something new in the first couple of years."

For its part, Time Warner management has said the company has explored a wide range of options, including spinning off the 84 percent-owned cable division completely.

As for Parsons, he has been praised for taming warring factions at the company after its disastrous $106 billion merger with AOL, which had ignited a spate of government investigations and a free-falling stock price.

Agencies

(China Daily 11/07/2007 page16)