When Time Warner (News - Alert) acquired AOL in January 2001, the $100 billion merger was hailed as a visionary attempt to marry old media with new media.

But the synergies between the two companies never materialized. High speed broadband came along and soon cable companies were snatching up AOL’s (News - Alert) dial-up customers left and right. This forced AOL to shift its focus to Internet advertising, which led to a series of disagreements between the management teams of the two companies.

Everyone knew, even as of a few years ago, that it was just a matter of time before the ill-fated union broke apart -- and in recent weeks it became even more apparent. Today it finally became official: Time Warner has announced its plan to spin-off AOL as an independent company.

"We believe that a separation will be the best outcome for both Time Warner and AOL," Time Warner chief executive Jeff Bewkes said in a statement. “The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses. The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company."

After the separation passes the usual regulatory hurdles and is complete, AOL will become a standalone company focused on growing its Web brands and services, which currently reach more than 107 million domestic unique visitors a month, as well as its advertising business, which operates the leading online display network that reaches more than 91 percent of the domestic online audience. AOL will also continue to operate it Internet access subscription service in the U.S.

Time Warner currently owns 95 percent of AOL and plans to purchase the remaining 5 percent stake from Google in the third quarter of this year.

"This will be a great opportunity for AOL, our employees and our partners,” said AOL chief executive Tim Armstrong, a former Google (News - Alert) executive who took over in March, in the statement. “Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options.”

“We play in a very competitive landscape and will be using our new status to retain and attract top talent. Although we have a tremendous amount of work to do, we have a global brand, a committed team of people, and a passion for the future of the Web," Armstrong added.

In March, Time Warner completed the spinoff of Time Warner Cable. Even without its cable and AOL divisions, Time Warner will remain one of the largest media companies in the world, with cable networks, magazines and a movie studio. The company owns the networks CNN and HBO, as well as the Warner Brothers movie studio and a wide array of magazines, including Fortune, Time and Sports Illustrated.