AOL to complete overhaul with publishing expansion

LONDON (Reuters) - Time Warner's AOL Web-services arm will complete an overhaul of its operations this year by expanding and centralizing its digital publishing operations, it said in a statement on Monday.

The challenged former Internet giant, which some investors have urged Time Warner to divest, said it was creating a new business unit to centralize its publishing efforts and help it make money out of the business.

Time Warner said last week it expected to make a loss for the fourth quarter of 2008, and said the economic environment had proved more challenging than expected for its ad businesses at AOL's online and publishing units.

AOL has been transforming itself from a provider of Internet access and subscription services into a supplier of news, sports and entertainment as well as an online advertising shop.

"Today's announcement ... completes AOL's transformation to an advertising supported business," the company said.

Bill Wilson, who oversaw the rebuilding of AOL's flagship AOL.com portal, will lead the new AOL unit, named "MediaGlow."

The unit will join AOL's digital-advertising offering, Platform-A, and its social-media unit, which includes social network Bebo and the AIM instant-messaging service, as the company's third core business.

AOL said it planned to develop 30 new Websites this year, including niche news and sports sites and a new pop-culture site aimed at children.

It also said it would add two new video-production studios in New York City and Los Angeles for original video productions to be distributed globally, including branded music and entertainment programing.

(Reporting by Georgina Prodhan; Editing by Andrew Macdonald)