Things are different at Time Warner (NYSE:TWX) these days, and that's not necessarily a bad thing after seeing the stock dip into the single digits last month.

The media giant posted surprising third-quarter results this morning. Revenue clocked in flat at $11.7 billion, lower than Wall Street was expecting. However, operating income rose 10% to $2.3 billion. Earnings from continuing operations climbed to $0.30 a share, well ahead of the $0.24 a share it posted a year ago and the $0.27 a share that analysts were targeting.

Despite the bottom-line win, Time Warner is lowering its guidance for all of 2008. It is now looking to earn between $1.04 a share and $1.07 a share this year, a few pennies shy of its original outlook. But if you want to turn that frown upside down, consider that the new tally includes a big restructuring hit in the final quarter related to layoffs at its Time publishing division. The good news here is that the company's earlier target of generating $4.5 billion in free cash flow is being bumped to $5.5 billion.

Party hats for everyone!

Well, except for AOL. No party hats for you!

The company's cable and network arms inched ahead in their typically consistent fashion during the period, bogged down by weakness at AOL and the company's magazine businesses.

The real shocker here is that AOL's ad revenue fell by 6% during the period. Remember when AOL was moving away from its subscriber access model because it thought it could make it up in online advertising? It has never been able to overcome the lost revenue from defecting members, and now even online ad revenue is heading the wrong way. Even leaning on interactive advertising leader Google (NASDAQ:GOOG) to outsource its paid search ads isn't helping.

Surprising weakness there should pretty much kill any thoughts of Yahoo! (NASDAQ:YHOO) or News Corp. (NYSE:NWS) making a play for AOL. Their own shareholders would recoil in horror. Unless Microsoft (NASDAQ:MSFT) wants to swoop in with some ridiculously low buyout offer, Time Warner will either have to spin AOL off the way it has with Time Warner Cable (NYSE:TWC) or devote resources to correct the surprising slide.

AOL has gone from being an opportunity to a liability. With its stock so low, value investors should be nibbling on Time Warner for its dependable cable and networks subsidiaries, with the occasional blockbuster out of its film studio.

In short, Time Warner has grown up even as its stock has gone down.  

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Longtime Fool contributor Rick Munarriz tells people that he's the "you've got mail" guy for kicks. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.