Time Warner Inc., one of the largest media, entertainment, and Internet companies in the world, formerly known as AOL Time Warner. In 2001 the media company Time Warner merged with online services company America Online. The merger soured, however, and in 2003 the company dropped AOL from its title, although AOL remained a subsidiary. Time Warner was itself the product of a merger in 1989 of publishing giant Time Inc. and Warner Communications Inc., a broad-based entertainment corporation that owned the Warner Bros. motion-picture production company. Time Warner encompasses film, television (TV), music, publishing, online services, and cable systems divisions, and holds investments in numerous other international entertainment and publishing ventures. The company’s headquarters is in New York City.

Time Inc., now a subsidiary company, was founded in 1922. The company’s best-known magazines include Time, Fortune, Life, Sports Illustrated, Money, People, In Style, Entertainment Weekly, Field & Stream, Sunset, Parenting, and Popular Science, some of which are also available online. Time Warner owns several publishing houses, including Warner Books; Little, Brown and Company; Time-Life Books; and Sunset Books.

The Warner Bros. subsidiary was established in 1923 as a film company. Warner Brothers Pictures has been one of the most successful studios in the history of the motion-picture industry. Warner Bros. also operates businesses in many other areas of the entertainment industry. Films and television shows produced by Warner Bros. Television are aired on broadcast TV and on the company’s cable TV channels Home Box Office (HBO) and Cinemax. In 1994 the company debuted The WB Network on broadcast television. Warner Bros. International Television licenses films and TV programs throughout the world. Warner Bros. also owns DC Comics, one of the world’s leading comic book publishers and the creator of Superman, Batman, Wonder Woman, and other famous characters.

In 1991 Warner Bros. launched an American retail merchandising arm—Warner Bros. Studio Stores—to capitalize on its internationally famous animated Looney Tunes characters, such as Bugs Bunny and Daffy Duck. The stores began operations in Europe in 1994. By 2000, Warner Bros. Studio Stores were operating in more than 180 locations worldwide. The stores began failing, however, and in 2001 most were closed.

The Warner Music Group is one of the world’s largest recording and publishing groups. It includes Warner Bros. Records, The Atlantic Group, Elektra Entertainment Group, Warner Music International, and Warner/Chapell. Warner Music Group’s stars include the singers Madonna and Travis Tritt and the rock groups Motley Crüe and Green Day.

In 1996 Time Warner acquired the Turner Broadcasting System from media mogul Ted Turner. The $7.6-billion deal gave Time Warner the world’s largest movie library and control of a number of well-known cable television networks, including Cable News Network (CNN), Turner Network Television (TNT), TBS Superstation, The Cartoon Network, and Turner Classic Movies (TCM). Other businesses Time Warner acquired with the purchase of Turner Broadcasting included motion-picture studios New Line Cinema and Castle Rock Entertainment, Hanna-Barbera Cartoons, and the Atlanta Braves major league baseball team. AOL Time Warner also owns Time Warner Cable, which provides cable television service and high-speed Internet access to customers in the United States.

In 2001 Time Warner merged with Internet giant America Online. The $106-billion deal paired a media empire with the world’s largest online service and marked one of the largest corporate mergers in history. Industry analysts predicted that the new company, named AOL Time Warner, would lead the Internet, media, and entertainment industries.

However, in 2002 the newly merged company began to falter. A slowdown in Internet advertising caused AOL Time Warner to lower its profit forecasts during the year. The company also came under scrutiny by the Securities and Exchange Commission and the Justice Department for the way it calculated advertising revenue. As the company’s stock price continued to decline, some board members raised questions about whether the merger had benefited Time Warner. Some AOL Time Warner executives placed hopes on a suit filed against Microsoft Corporation. The suit sought compensation for damages to Netscape Communications Corporation, which until 2008 produced an Internet browser that competed with Microsoft’s Internet Explorer. Netscape was acquired as part of the merger with AOL. (Encarta Encyclopedia is owned by Microsoft Corporation.)

In 2003 an internal shakeup at the company led AOL cofounder Steve Case to resign as chairman, although he remained on the company’s board of directors until the fall of 2005. Former Time Warner executive Richard Parsons became chairman and chief executive officer of AOL Time Warner. After the two companies merged, AOL officials had assumed most of the leadership positions. As a result of the shakeup, Time Warner executives took the leadership.

In May 2003 AOL Time Warner settled its lawsuit with Microsoft. Microsoft agreed to pay $750 million and to license its Internet Explorer browser to AOL without charge for seven years. Many analysts expected the agreement would effectively end further development of the Netscape business. The settlement also gave AOL nonexclusive rights to license Microsoft software that provides secure downloads of digital music, movies, and other content. Both companies pledged to make their instant-messaging software compatible.

The settlement with Microsoft was seen as one of many steps that would help AOL Time Warner pay down its debt and focus on the market for digital media. In 2003 the board of AOL Time Warner agreed to remove the letters AOL from the company’s name after deciding that the AOL brand name confused investors and the public about the company’s diverse portfolio of businesses. Along with the restored name of Time Warner Inc., the company also reverted back to its old stock symbol, TWX.