Is it me, or do Time Warner (NYSE:TWX) and its AOL subsidiary seem to sport split personalities? Both can be exciting businesses or dull behemoths, depending on how you look at them.

The exciting AOL
Rumors are flying that Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Comcast (NASDAQ:CMCSA), Yahoo! (NASDAQ:YHOO), and my Uncle John (no exchange; no symbol) are interested in acquiring a stake in AOL to improve their fortunes on the Internet.

AOL isn't standing still technically, either. It recently rolled out TotalTalk, an Internet phone service. In October it purchased Weblogs, one the leading blogging companies. Today, AOL announced the acquisition of MusicNow from CircuitCity (NYSE:CC). This music download service offers $0.99 pay-as-you-go service or flat-fee monthly subscriptions.

From all the news, you'd think the future was blindingly bright.

The boring AOL
But look at yesterday's third-quarter results. The company lost 678,000 subscribers last quarter and 2.6 million so far this year. As you might expect, revenue declined 5% year over year, although operating income rose 16%.

The exciting Time Warner
Yesterday's earnings release began with the company's announcement that it increased its share buyback program by $7.5 billion dollars. That's a total of $12.5 billion going into share repurchases. All divisions except AOL reported higher revenue, and all divisions except filmed entertainment reported higher operating income.

The boring Time Warner
Overall, revenue increased 6%, while operating income was up 10% (after adjusting for a one-time charge last year to settle government investigations). Those are good results only if you ignore analysts' expectations for the company to grow earnings by 11.5% over the next five years. Even worse, adjusting net income to account for last year's reserve makes year-over-year comparisons roughly even.

The company made note of the recent decline in net debt. Sorry, but you can kiss that trend goodbye. As the company starts spending $12.5 billion to buy back stock, I'd expect net debt to shoot back toward the moon.

Oh, and that debt caused its own ripple effect yesterday. Standard & Poor's put the company's long-term debt credit rating on Credit Watch with negative implications. It will now cost more for Time Warner to borrow money -- just as credit costs are climbing. That ought to help dull future earnings, even with fewer shares outstanding.

Foolish final thoughts
Time Warner, a Motley Fool Stock Advisor recommendation, does have many exciting businesses. But with the prospect of ballooning debt, and the cost associated with servicing that debt, the company's risks are on the rise. For now, Time Warner is a company in transition, and its cloudy outlook should keep its stock price in check unless major news from AOL shows where near-term earnings are headed.

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Fool contributor W.D. Crotty does not own shares of any of the companies mentioned here. Click hereto see The Motley Fool's disclosure policy.