Investors sent shares of Time Warner as high as 5 percent ahead of its conference call yesterday in anticipation of some clarity on the future of the once biggest media company in the world.

Whether newly appointed Chief Executive Jeff Bewkes provided momentary comfort or genuine relief is up for debate.

Bewkes, in the call, sketched out ideas for a shakeup at the company, including plans to cut costs across the company, figure out the best ownership structure for Time Warner Cable, and, most important, split up AOL. 

Bewkes has a lot on his plate at Time Warner, but few more urgent than AOL. Key to reviving the company’s ailing stock price is a new strategy for AOL, particularly as it faces potentially stronger competition if Yahoo Inc accepts a $45 billion offer from Microsoft Corp.

Bewkes said he plans to split the AOL Internet division’s dial up business, which is losing subscribers, from a growing Web site and advertising business. But that plan doesn’t put questions about AOL to rest by any stretch, since many believe the restructuring is simply a precursor to further moves, like a spin-off or sale.

And what about Time Warner Cable? Bewkes’s answers raised as many questions. Time Warner is starting negotiations with Time Warner Cable over a possible spin-off of its 84 percent stake or the buy-in of the 16 percent it does not own. Talks will likely conclude by the time it reports first-quarter earnings, executives said.

In a memo to employees Bewkes himself acknowledged that all his plans for the company will take time.

“We have a lot of work ahead of us, and there are no silver bullets or quick fixes,” he wrote.

Reactions ranged from moderately relieved to disappointment.

Three views from Wall Street:

Michael Nathanson, Bernstein Research: In the coming few months, we will finally get some clarity on the shape of the future TWX.   Given the low valuation, negative sentiment and potential for positive restructuring news flow, TWX appears to be a safe place in the coming months.

Ingrid Chung, Goldman Sachs: We view the plan as balanced and reasonable - it’s clear that things will change, but that change will be gradual and thoughtful.

Richard Greenfield, Pali Research: Bewkes sounded as if he was reading page one of a McKinsey “CEO manual” with little vision for Time Warner as a whole, while Murdoch and Iger each provided a clear vision of why their respective companies are outperforming, what differentiates their strategy, and why outperformance should continue.  Beyond making the company smaller (albeit even that might occur slower than expected if TWC is bought in vs. spun out), it’s unclear why TWX’s businesses are well positioned to grow.   

(Reuters) 

Keep an eye on:

• The strike-hobbled television industry is scrambling to get back on its feet and salvage what remains of the broadcast season ahead of an expected deal to end the three-month old screenwriters’ strike. (Reuters)
• Predictions of the newspaper industry’s death is nothing new, but with 2008 looking like more depressed profits and falling stock prices, the forecasts are gloomier than ever. (The New York Times)
• The troubled combination of Time Warner and AOL, underscored this week, could provide a glimpse of what Yahoo would look like under Microsoft. (Marketwatch)
• Cisco Systems gave a disappointing outlook as part of its earnings report, warning of a rapid slowdown in European and U.S. orders. (Reuters)

(Photo: Reuters)