I Think Icahn, Time Warner

When billionaire investor and occasional corporate raider Carl Icahn took a financial (and vocal) position on Time Warner (NYSE:TWX) earlier this year, you just knew that the company would be bent on maximizing shareholder value -- sooner rather than later. Apparently, the process hasn't been moving fast enough for Icahn's taste; he's retaining Lazard (NYSE:LAZ) to weigh strategic alternatives and possibly propose a new slate of directors.

Icahn can be ruthless when his investments aren't going anywhere. That's why he has suggested that Time Warner ramp up its share buyback, while hustling to get the company split up through spinoffs and divestitures.

It's no secret that Time Warner's AOL has been in strategic talks with Google (NASDAQ:GOOG) and Motley Fool Inside Value pick Microsoft (NASDAQ:MSFT) in an effort to strike some form of deal for AOL.com. Google is the contractual provider of contextual advertising for AOL at the moment, but Microsoft would love to use AOL's juicy real estate as a way to break in with its AdCenter service.

Shareholders may be frustrated to see Time Warner stock stuck in the teens over the past few years, but it hasn't all been bad. In fact, the stock has risen by 36% since it was recommended in Motley Fool Stock Advisor three years ago. That places it pretty even with the stock market's return over that time.

This doesn't mean that Icahn is completely out of line, though. The fact that there are so many gentleman callers lining up alongside AOL's wraparound porch proves that the interactive media giants believe the value of America Online's site network can be maximized if handled by a fresh set of hands. There would probably be no shortage of suitors for Time Warner appendages, such as HBO and CNN, if they were put on the block.

That's why it's frustrating to see a company so rich in intellectual capital on the verge of being smashed to pieces like some peppermint pig. It already sold one asset -- Warner Music Group (NYSE:WMG) -- way too soon. Time Warner may consider Icahn to be a meddlesome distraction, but the truth is that the company has had plenty of chances to get it right. It's insane that it should be considering unloading a stake in its fastest-growing business (interactive advertising).

Time Warner isn't a broken company. In the past, Icahn has poked his head into some real stinkers, such as Blockbuster (NYSE:BBI), and Time Warner is no Blockbuster. Then again, for investors, it hasn't been much of a blockbuster either. That's the problem. But something tells me the solution may not be in Icahn's bag of tricks this time.

Longtime Fool contributor Rick Munarriz has been an AOL subscriber since 1992. Yes, he really does like it there. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.