Why A Time Inc Spin-Off Makes Sense

Implications: New leadership, plus freedom from “synergy” and “cross-divisional cooperation” will give Time Inc. an opportunity to figure out its future

Analysis: The idea that new Time Warner CEO Jeff Bewkes will spin off Time Inc is gaining traction.  Why?  Because it makes sense from both a parent company and operating unit perspective.

To Time Warner and its investors, Time Inc. represents a business that’s flat and looking forward to an extended period of decline.  Recent closures include Business 2.0, LIFE and Teen People.  And even if online revenues are up, there’s still very little reason to be excited about what Time Inc. can do to help the long-suffering (AOL) Time Warner stock price.

From the Time Inc. perspective, things look a little different.  As the internet has transformed the media business, Time Inc has for years been forced into corporate strategies and missteps dictated more by the myths of “synergy” and “cross-divisional cooperation” than by commonsense.

With a stable of great-but-tired brands, Time Inc needs to find new ways to connect with consumers beyond its printed pages.  

Liberation plus new leadership will give the company at least a fighting chance to figure out what comes next.