The Wall Street Journal's Matthew Karnitschnig imagines the company, including the still-proud journalists at Time Inc., as the pet of Rupert Murdoch, or perhaps of some dreary cable television provider like Comcast or DirecTV.

Maybe. As troubled as the AOL division was, it at least hypothetically had growth potential Time Warner's remaining divisions don't offer. But it's safe to say Time Warner CEO Jeff Bewkes (pictured) isn't going to sell to Murdoch without some ironclad protection against getting shanked by Murdoch's MySpace CEO Jon Miller, who Bewkes has repeatedly screwed over.

Time Warner has been trying to sell its Internet unit since at least 2005, but Bewkes and his colleagues want a higher price than the market seems to be offering. Meanwhile, AOL's value keeps slipping.

Yahoo's top executives have thought about buying AOL to bulk up against Google — and, depending on who you ask, either fend off Microsoft, or make a more appealing package for Microsoft to buy.

Ballmer flirted with buying Yahoo, but really wants its search business; he'd be happy to pick up AOL's share of the search business, too, especially as it's controlled by Google.

The thing is, all of those statements are as true today as they were a year ago. In a year of round-and-round talks, nothing has changed — least of all, these players. Yahoo has a new CEO, former Autodesk chairman Carol Bartz, but the software executive wasn't in New York.

Fresh blood would be helpful here, to either get a deal done or declare talks off for good. Google has continued to add market share as its competitors dither; advertisers are getting nervous about its growing control of the online advertising business. They'd like to back a rival. But who? Less talk, more action, please. Only Larry and Sergey will be happy if Bewkes, Bostock, and Ballmer meet next year in New York.

What's odd is that Time Warner CEO Jeff Bewkes isn't getting more criticism for AOL's numbers. As the head of HBO, he was one of a handful of Time Warner executives who loudly opposed the AOL deal. But enacting Time Warner's revenge on AOL by driving the business into the ground seems a strange way of making things right with shareholders.

Bewkes's hand-picked boss for AOL, former NBC executive Randy Falco, has been a complete disaster — a short-timer waiting for the company to be sold. Bewkes and Yahoo's Jerry Yang have been holding desultory talks on selling AOL to Yahoo. But Bewkes's negotiating position is considerably weakened by these results. Why didn't he sell sooner — and when will he pay the price for mismanaging AOL?

It's as if he thought that playing a game of buzzword bingo would masquerade as strategic thought. A television salesman by trade, Falco was plucked by Time Warner CEO Jeff Bewkes from NBC Universal to replace Jon Miller, in a universally derided move. A commonly held belief among insiders: Falco and Bewkes thought AOL would be sold off by now, with Falco moving on to some role at Time Warner's film and television properties. AOL has continued to embarrass. And so has Falco. The only question is which exit will come first.

Some observers say Time Warner executives did a bait-and-switch, tacitly encouraging Yahoo and Miller to proceed with the appointment, and then publicly denying that they ever approved a deal. Backstabbing and double-dealing at the world's most famous agglomeration of corporate infighters? We are not shocked. But we don't think Miller, who saw their work firsthand at Time Warner, ought to be, either. (Photo by Lou Reed/Los Angeles Times)

Yahoo employees don't relish a Yahoo-AOL merger, mostly because they and the rest of the Valley view AOL as a relic of the 1990s, still somewhat popular only because old people in flyover country aren't comfortable with change, even if it's just changing their homepages in Internet Explorer for the first time since 1997. We're skeptical Yahoo can close the deal. Cash-rich Microsoft is also said to be considering buying AOL in order to boost its brand-advertising inventory, and Time Warner CEO Jeff Bewkes just wants to offload the embarrassment. Don't expect CEO Steve Ballmer to let Yahoo embarrass him twice.

If we're the shareholder, we're not calmed. MySpace is far more popular in the U.S. than Bebo. Despite that, ad partner Google still can't figure out how to make money off it. Why doesn't Bewkes just admit it? He had other things in mind when he bought Bebo. (Photo by AP/Peter Kramer)

Bewkes has been trying, on and off, to swap AOL and a fistful of cash for a 20 percent stake in Yahoo, which would help CEO Jerry Yang fend off both Microsoft and Carl Icahn. Yahoo executives aren't particularly interested in having AOL's aging Internet assets dumped on them to manage — but they were eager to buy Bebo, particularly Yahoo Europe head Toby Coppel. Yahoo has a deal to sell ads on Bebo in Europe, a deal that most expect AOL to do away with after it expires. Buying Bebo serves to makes AOL more attractive to Yahoo — and if that gets AOL off Time Warner's back, then it may be $850 million well spent.

The good news: You can wait and watch Made of Honor on your iPod in about three months! The bad news: It'll cost you $14.99 to download it. (Or $9.99 three months after that.) And for digital media that costs exactly nothing to reproduce, package or distribute, we think that amounts to little more than information highway robbery. And just in time for the studios to stonewall SAG on new-media revenues!

Or maybe they're not quite connected — yet. Conceding it would get paid for new media when studios got paid, the WGA settled its strike in February by negotiating for roughly 2% of studios' online grosses each year through 2011. But in an earnings call yesterday, Time Warner CEO Jeff Bewkes cited a 60%-70% profit margin during a VOD trial for Warner Bros. films on cable — more than twice the return on Time Warner DVD rentals. It's anyone's guess how that shakes out in terms of purchases, but with DVD sales last quarter at $3.5 billion, and with a fairly clear break between online and traditional media consumers, even a tenth of that revenue online would be enough for SAG president/time-bomb Alan Rosenberg to reinforce the hard line as the first round of negotiations come to a close Friday.

Moreover, as an observant tipster pointed out to us this morning, the markup on these downloads is pretty obscene, maybe even illegal. After piracy concerns were allayed in the last year, pricing was the only remaining sticking point for Apple — which wanted to keep purchases at $10 — and studios, which compromised at $15. Albums on iTunes cost an average of 40% less than their CD counterparts; but with online retailers and box stores pressuring DVD prices below $20, why should they get away with a difference as little as 15% in some markets — especially with no extra features or deluxe packaging? The courts have even addressed this before, but it usually applies to manufacturers complaining about suppliers, not the other way around. Someone! Get the FTC on the line!

• Purchase New Movies on iTunes [Apple]

The deal isn't likely to happen. Desperate for an alternative to Microsoft, Yang is said to be still hoping for an offer from News Corp. as well. Meanwhile, Microsoft execs told the Wall Street Journal they expect merger talks to turn "friendly" any day now. Or the could just propose a new slate of directors when the current board comes up for reelection on March 14. At this rate, that's seeming easier.

Some insiders doubt this, expecting Falco to retire instead and saying it's premature to speculate on Viebranz's future. Certainly, Falco and Viebranz have plenty of opportunities to screw up and nix these moves. But I'm most fascinated by the man who's left out in the cold in any scenario being whispered: Ron Grant, AOL's COO and Falco's so-called "human computer." Apparently Time Warner management views him as fit for number-crunching and payroll-slashing, not actual leadership material.