AOL Inc. will start trading as an independent public company Thursday after nearly a decade with Time Warner Inc. _ and some analysts are already panning the stock.
The spinoff is likely to help boost Time Warner Inc., eliminating "a continual source of investor frustration" for the New York media conglomerate, BMO Capital Markets analyst Jeffrey Logsdon said in a client note.
AOL, meanwhile, has an uphill climb.
"All of the company's segments are in decline," Merriman Curhan Ford's Richard Fetyko told investors in a note, initiating coverage with a "Sell" rating.
He pointed out that AOL's long-declining dial-up subscriber base is likely to drag down visits to the company's Web sites. And that means fewer ad dollars _ the revenue stream AOL is counting on for its second act.
AOL has about 5.4 million Internet subscribers, down from a peak of 26.7 million in 2002.
As that base continues to erode, it is looking to improve its Web sites and wring more advertising money from them.
Benjamin Schachter, of Broadpoint AmTech, has doubts about the strategy. In a note Tuesday, he pointed to traffic declines over the past nine months at AOL's Internet properties.
"If the new management team cannot fix user engagement," he said, "most of the other initiatives will not mean much." Schachter rates AOL "Neutral."
AOL shares slipped 52 cents, or 2 percent, to $23.15 in premarket trading, while Time Warner edged up 16 cents to $29.38.