The news at a glance

AOL: Why Time Warner is spinning it off

Time Warner has indicated that it is preparing “to move beyond its disastrous 2001 merger with AOL,” said Shira Ovide in The Wall Street Journal. Time Warner CEO Jeff Bewkes said during a conference call with analysts last week that the company has tentative plans to spin off the tarnished Internet unit to Time Warner shareholders. Nobody should be too surprised. Time Warner reported that first-quarter profits fell 14 percent from the first quarter of 2008, as “deterioration at AOL and the Time Inc. magazine business offset improved movie studio and cable-TV profits.”

Getting rid of AOL would be good for Time Warner’s focus, said Tim Arango in The New York Times. Without AOL, Time Warner would be “a stripped-down conglomerate,” producing “television and movies for a mass audience.” AOL’s future, meanwhile, is far from certain, said Matthew Creamer in Ad Age. Time Warner has hired Google veteran Tim Armstrong to run AOL as a freestanding company, but he has “made no guarantees about the long-term survival of AOL’s current offerings.” One thing is certain: Armstrong wants to find a way to charge advertisers more to place their ads on AOL.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Retailing: Filene’s Basement files for bankruptcy

Filene’s Basement, one of the original discount clothing retailers, has filed for Chapter 11 bankruptcy protection, said Donna Goodison in the Boston Herald. Real estate firm Crown Acquisition plans to buy 17 of the chain’s 25 outlets at a bankruptcy-court auction, saying “it’s armed with cash and credit to revive and expand” the stores, including the original Filene’s Basement in downtown Boston. Crown Acquisitions founder Stanley Chera says he’ll draw on his relationships with such retailers as Saks and Barneys to freshen up the chain’s “stale” merchandise.

Pharmaceuticals: A black mark for Botox

The Food and Drug Administration has ordered the maker of Botox to place a “black-box” warning on the drug’s packaging, said Jacob Goldstein in The Wall Street Journal. Such warnings are required for drugs that present serious or life-threatening health risks. The order also applies to rival products Dysport and Myobloc. All three products derive from a bacterial byproduct called botulinum toxin, which causes botulism. The drugs, used to smooth facial wrinkles, can interfere with breathing and swallowing.

Electronics: Amazon readies a large-screen Kindle

Beleaguered newspaper and magazine publishers got a bit of good news this week when Amazon.com released plans for a large-screen version of its Kindle electronic reader, said Brian Heater in PC Magazine. The device “will have a larger screen than the current Kindle, with dimensions closer to those of a standard newspaper.” The new device could “theoretically give newspapers a way to charge for content—something they’ve largely had difficulty doing over the Web.”

Publishing: A reprieve for The Boston Globe

New York Times Co. “has postponed its threat” to close The Boston Globe, said Richard Pérez-Peña in The New York Times. With the paper “on a pace to lose $85 million this year,” Times Co. is seeking $20 million in concessions. Three small unions have reached an agreement with the company, and now “the fate of the paper appears to turn on talks with the Boston Newspaper Guild, which represents more than 600 newsroom, advertising, and business office workers.” Times Co. paid $1.1 billion for the Globe in 1993.