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Time Warner to Spin Off AOL? 164

image77 writes "The Washington Post is reporting that Time Warner is considering spinning AOL into a separate company via an IPO. You might recall that AOL bought Time Warner for over $100 Billion in 2001, and then went on to lose almost that much in 2002."
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Time Warner to Spin Off AOL?

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  • Aol is dying (Score:4, Interesting)

    by guildsolutions ( 707603 ) on Sunday May 22, 2005 @02:23PM (#12605927)
    AOL is a dying system. It was first used as a dial up connection with an interesting GUI. this is no longer what the end user wants. They still focus on dial up, versus the exploading broadband arena. IMO this is one of the first steps to its grave. Seperation of the company who's more or less holding it afloat.

    AOL? Hahaha you use AOL? damn dude.... I feel sorry for ya.

    • Re:Aol is dying (Score:3, Insightful)

      by DownTownMT ( 649551 )
      They still focus on dial up, versus the exploading broadband arena.

      Actually, they are pushing AOL for broadband. But the thing is, why pay an aditional $14.95 [aol.com] when you already have to pay about $30 a month just for the cable modem service.

      They were great in the mid to late 90's when the only way to get on-line was through a modem. Hell even i used them up until about 3 years ago when cable became avaliable in my area. But the reality is that the company is on its way out, its just a matter of when.

    • Re:Aol is dying (Score:5, Insightful)

      by ThePromenader ( 878501 ) on Sunday May 22, 2005 @02:38PM (#12606008) Homepage Journal
      ... I agree. AOL has by far outlasted its beginnings, and this only because of the "first web generation" (cough) educated to its (double cough) teachings (flashing gif, banner banner. Please click where you normally shouldn't have to click to continue so that you can look at this nice ad first).

      In today's market world, when a company (holding) wants to rid itself of its less profitable ventures, it must first isolate it and make it independant from its "parent" inter-financial network. If someone is gaff enough to take the (dangling) bait, great, but if not, it becomes an investment apart, becomes less (investor) interesting, wilts and dies.

      We've seen this story countless times over the past few decades, with only the logo that changes.
    • They still focus on dial up, versus the exploading broadband arena.

      That may be the case in the US, but here in the UK they're very much pushing broadband. Just look at their home page [aol.co.uk]. For what it's worth, the prices quoted are competitive with other broadband services.
      • That's because BT owns all of the lines so the rates end up rather similar. Broadband is priced quite differently in the US, so people would need to get broadband and then AOL on top of it, resulting in even more money.

        The price difference between $23 and $10 for dialup may not be that big of a deal to some people (they might like the features of AOL, for instance), but paying $60 instead of $45 when you just want a fast connection?

        Still, it would be quite ironic if AOL has to move to the UK in order

    • You are forgetting that the end user is most likely stupid. They don't know what bandwidth is, but they like the GUI.
  • by TWX ( 665546 ) on Sunday May 22, 2005 @02:24PM (#12605933)
    ...stays under the control of Time Warner but ends up going off and doing it's own thing then they should name it "AWOL"...
    • by eobanb ( 823187 ) on Sunday May 22, 2005 @03:14PM (#12606170) Homepage
      One of the reasons that Time Warner wants to spin off AOL (basically get rid of them) is that AOL is one of the stupidest companies I've ever known.
      Virtually all of AOL's assets, except for the wildly popular AIM, are worthless: their flagship subscription dialup service was killed by broadband (and a lot of people get broadband from Time Warner...). Netscape was killed by IE and now, Firefox (which came from Netscape's source...). Nullsoft's WinAmp was killed by iTunes, and meanwhile, AOL partners with Apple on iTunes. AIM is pretty much all that's keeping them going, and even that is being threatened (only on the horizon so far, but coming up fast) by XMPP. AIM (with IM, email, weather, news, games, and downloads) is essentially what AOL once was, but it's just all ad-supported now. When AIM goes down the tubes, replaced by Jabber, text-messaging, and h.264 video calling, America Online will be completely dead.
      TW understands this. They want to get rid of the liability that's AOL as soon as possible.
      • Audioscrobbler's http://www.audioscrobbler.com/ [audioscrobbler.com] latest plugin count has Winamap beating iTunes by almost 3:1. Here's the most recent count, if you're interested. http://www.audioscrobbler.com/development/graphs.p hp [audioscrobbler.com]
      • fyi, firefox does not come from netscape source. they are both based on code from the mozilla foundation's code which develops (netscape switched from their code base to mozilla code base when they bought mozilla few years ago). this is reflected in that every release of netscape is the previous release version of mozilla. firefox is just a streamlined web browser derived from mozilla as well, but it is an independant project not under the pervue of time-warner.

        as for winamp, netscape, and mozilla, they
        • by Aldric ( 642394 )
          When it become quite clear that Netscape was worthless to AOL, they made it open source. The open source community looked at the code and rewrote it from the ground up. So, Mozilla is loosely descended from Netscape. They may be partially funded by AOL, but they are not owned by AOL.
      • A few points:

        Lots of people still pay AOL, even if they have broadband. They also think Comcast has a different Internet than AOL or TimeWarner.

        WinAmp wasn't killed, especially not by iTunes. The people who like WinAmp tend to despise iTunes as a bloated and annoying piece of crap, and only get for running the uninstall program with.

        AIM is threatened by MSN and Yahoo. Nobody really started to use Jabber for some reason, and XMPP doesn't really exist yet. Also, sending messages on your cell phone suck
        • I wish they would fix up the jabber.org server, it disconnects people constantly. I would love to recommend and switch people to jabber, but I can't in this state, and I can't have them change servers every few months like I've done :-(
  • I mean, if it cost 100 billion, getting $9.99 isn't so bad...
    • Overpriced at $9.99 (Score:4, Informative)

      by poptones ( 653660 ) on Sunday May 22, 2005 @09:24PM (#12608847) Journal
      I live in the sticks, dialup is all I can get. and I got sick of paying twenty bucks a month when so many are offering it for half, so I decided to go with Netscape's bargain offer.

      It's not even worth it at half the price of "regular service." they DO NOT support anything besides windows and even if you are lucky enough to get on you still get to deal with AOL's sucklicious proxy nest. the only way I was able to reach secure sites like paypal and my bank from behind my IP Cop router was to create a tunnel to a third party server and connect from there, somehow AOL has managed to completely screw up this part of the service.

      They don't support Mozilla or Firefox or any of their own products and in fact they have these special applets that REQUIRE you to run windows lest you be forever unable to reconnect after the first time some tiny thing goes wrong with your account.

      I never would have believed anyone could screw up simple DIALUP service so incredibly badly... until I dropped them and tried Netzero. But that's a whole 'nother rant, suffice to say I am back to paying twenty bucks a month to a local ISP for dialup and I'm not likely to be complaining about the price anytime soon.

  • About time, too - (Score:4, Insightful)

    by Toby The Economist ( 811138 ) on Sunday May 22, 2005 @02:25PM (#12605940)
    AOL buying TW was the greatest travesty of the dot com boom.

    --
    Toby
    • Re:About time, too - (Score:5, Informative)

      by TubeSteak ( 669689 ) on Sunday May 22, 2005 @02:41PM (#12606023) Journal
      AOL screwing over Justin Frankel
      (of Winamp, Gnutella, & WASTE fame)
      was a bigger travesty.

      The man was pure gold and the software he touched became golden too

      So what did AOL do? They put him on such a short leash that he quit.

  • by TimmyDee ( 713324 ) on Sunday May 22, 2005 @02:26PM (#12605943) Homepage Journal
    Normally I'm skeptical of the market correcting the mistakes it makes, but this appears to be a case that might prove me wrong. The AOL-Time Warner merger sounded like a good idea on paper, but the two companies were already large enough that integrating their services and products was probably too great a hurdle, especially considering the time-frame under which it took place.

    Either that or the combined company was horribly mismanaged.
    • "integrating their services and products was probably too great a hurdle"

      "Either that or the combined company was horribly mismanaged"

      Yes, both. Altough it could have been a marriage made in heaven!
      At this moment in time, big media and the internet do not mix easily for obvious reasons. When AOL made the merger with Time-Warner, AOL was hoping for a huge big load of content and Time-Warner was hoping for the mother of distribution channels. But as we all know, up till now there has not been a defini

    • What does "integrating services" have to do with anything? Time-Warner didn't merge with AOL just to get bigger. They're a media company, and there was an important growing medium that they needed to grow into, quickly: the Internet. One way to do this is to merge with an Internet company.

      As it happened the merger was a disaster. But that wasn't because the idea of merging with an Internet company was bad. It was because the Internet company Time Warner chose to merge with was an overvalued and mismanaged

  • Alright... (Score:3, Insightful)

    by suitepotato ( 863945 ) on Sunday May 22, 2005 @02:26PM (#12605946)
    ...who didn't see this coming?

    And how will AOL afford all the mail clogging CDs without siphoning off funds from Time Warner?

    AOL is being pushed back out the door to live on its own (like a middle-aged chronically unemployed geek being kicked out by mom finally). Oracle is still living under Darth Ellison. Netscape is using Microsoft's engine as an option (in an amazing display of tacit acknowledgement of defeat) even as Firefox continues to batter MSIE market share. If only they'd gotten together years ago...

    "You've got queries!"

    Oh well.

    At least they've still got legions of lusers to rely on... until they finally close their checking accounts to keep AOL from charging them for service they cancelled in writing six times over the course of a year.
    • Re:Alright... (Score:4, Informative)

      by sabernar ( 245306 ) on Sunday May 22, 2005 @02:58PM (#12606096) Homepage
      Don't mark this guy Insightful. AOL is actually a big money maker for Time-Warner. Take a look at the numbers. Just because they don't make as much as they used to, they're still in the black. They actually make a lot of money, and they don't have to "siphon" funds from the parent company.

      Do your researching before spouting lies and half-truths.
    • by jez9999 ( 618189 )
      AOL is being pushed back out the door to live on its own (like a middle-aged chronically unemployed geek being kicked out by mom finally).

      I love it when you use analogies that we can understand.
    • Please. (Score:2, Funny)

      by Anonymous Coward
      Wow, that was an impressive display of one-liners and empty quips. If you haven't already, I'd strongly suggest a career in a monthly tech magazine of your picking. You'd fit right in.

      [...] even as Firefox continues to batter MSIE market share.

      Not even breaking 10% doesn't exactly inspire images of battery. But, hey, whatever gets you those mod points...
  • asdf (Score:2, Interesting)

    by Demoknight ( 66150 )
    who needs AOL anymore?
    thought AOL got the better end of the merger deal because they picked up TW's content?... content is king and always will be... why do you think bit torrent is the most popular thing on the net right now? its the only way we're able to get the content we want.
  • *confuzzled* (Score:4, Interesting)

    by JamesTRexx ( 675890 ) on Sunday May 22, 2005 @02:28PM (#12605953) Journal
    AOL bought Time Warner, and now Time Warner decides to spin off AOL? Who's the boss of whom here?
  • by VON-MAN ( 621853 ) on Sunday May 22, 2005 @02:29PM (#12605955)
    AOL to spin off CompuServe?
  • by PornMaster ( 749461 ) on Sunday May 22, 2005 @02:29PM (#12605958) Homepage
    The AOL purchase of Time Warner was just a way for AOL to try to use its share price to turn into something lasting. They knew at the time that their business was heading towards obsolescence. This was rather inevitable.
  • by jZnat ( 793348 ) on Sunday May 22, 2005 @02:32PM (#12605974) Homepage Journal
    Time Warner later mentioned that they were sick of their employees spending all day chatting on AIM and claiming they were "beta testing" the next release.
  • Technically.... (Score:5, Informative)

    by fm6 ( 162816 ) on Sunday May 22, 2005 @02:32PM (#12605978) Homepage Journal
    AOL did indeed buy Time-Warner, but it was really a merger. At the time, nobody realized (that they'll admit) how inflated AOL stock was, so it seemed to make sense to structure the merger as acquisition. That allowed them to pay for the merger simply by giving AOL stock to Time-Warner shareholders and renaming AOL as "AOL-Time-Warner".

    "AOL bought Time-Warner", while technically correct, is pretty misleading, since Time-Warner management initially had an equal role in the combined company. And "equal" soon changed to "dominant" as it become more and the AOL part would never lived up to initial expectations, and shareholders granted more and more authority to the Time-Warner part.

    • Re:Technically.... (Score:1, Interesting)

      by Anonymous Coward
      In what parallel universe did people not know that AOL, and every other dot bomb, had an overinflated stock? I am going to assume that every reasonably-intelligent person knew that AOL was overvalued, and the only question in everyone's mind at the time was how much money am I going to make before this ship sinks.

      At the time I stated on more than one occasion that Time-Warner was making an incredibly stupid gambit in assuming that merging with AOL would pay off. They felt that the stock bump from being att
    • At the time, nobody realized (that they'll admit) how inflated AOL stock was, so it seemed to make sense to structure the merger as acquisition. ... Time-Warner management initially had an equal role in the combined company. And "equal" soon changed to "dominant" as it become more and the AOL part would never lived up to initial expectations ...

      I see it more as TW destroyed AOL with mailice and self destructive spite. AOL with full ability to distribute TW content would indeed have lived up to expectation

  • by Esion Modnar ( 632431 ) on Sunday May 22, 2005 @02:36PM (#12605997)
    wrapped in half-raw bacon. Followed by a 12-pack of beer. Followed by a ride on the Tilt-a-Whirl.

    You just know it's all coming back up.

  • Say it ain't true (Score:3, Insightful)

    by inkswamp ( 233692 ) on Sunday May 22, 2005 @02:37PM (#12605999)
    You mean, merging already massive and powerful corporations into mammoth mega-corporations might not be such a good idea after all? You mean, nonstop, mindless growth in business might not be inherently good? You mean consolidating more and more power into fewer and fewer hands might not make the world a better place?

    Gees, I must be some kind of genius because I've been saying that for years.

    • Yes, but where were you right before FedEx decided to buy Kinko's?

      Kierthos
      • Yes, but where were you right before FedEx decided to buy Kinko's?

        Best thing that happened to my neighborhood. There are T-Mobile hotspots in all the Kinko's. And now they're in all the FedExes. But Caribou Coffee is hooked up with SBC. But with the T-Mobile in the FedExes my computer can smell the wireless signal from the FedEx across the street when I'm at Caribou.

        Except at 4:30, when the mail truck parks between the two, and I lose all signal for 12 minutes.

        I'm starting to think my life is
      • I think you could argue that Fedex and Kinkos weren't stagnant. It isn't as though TW or AOL were centers of innovation near the time of the merger.
  • by Crimson Dragon ( 809806 ) * on Sunday May 22, 2005 @02:38PM (#12606006) Homepage
    Well, this just proves that money isn't everything. Around the time of the merger, one of the largest corporations on earth was being created. It was the greatest thing to happen to the corner of Wall and Broad in decades. Stock analysts gushed over the seemingly invincible titan.

    What on earth happened?

    It seems that AOL has lost its unique luster... the early days of the burgeoning internet long since past. The prime days of AOL were seen when there was no other way for Johnny Nontechie to get information from the internet with any kind of ease of use. It, arguably, represented one of the first comprehensive portals accessible to the end-user.

    The Internet grew, and AOL stopped being so unique. A failure to diversify and many flawed versions of the AOL software later, its popularity has waned. Time Warner has diversified its Roadrunner offering to add portal features, and so has everybody and their mother....

    Absorbing antiquated business models in lateral merger never makes for a good formula unless you plan to do something with the antiquated business model (you know, innovation and the like?). Was it planned to boost Roadrunner's position? Was it a lack of foresight? Who knows.

    It will mercifully end soon enough, this failed experiment.
    • Absorbing antiquated business models in lateral merger never makes for a good formula unless you plan to do something with the antiquated business model (you know, innovation and the like?).

      Most of these huge mergers fails to deliver. However, many decsion makers profited personally from it.

    • by Anonymous Coward
      There's no mystery about this at all.

      If anyone had bothered to ask any techie about AOL at it's most invincible peak, there would be only one possible answer forthcoming: "It's crap, and it's irrelevant, and there's nothing actually there".

      The fact that business people use some wierd form of non-Euclidean accounting that values form and hype over substance has always seemed wierd to me. They saw size and broad presence in AOL, and thought that they represented large asset value. No, they merely represe
  • Their ages?? (Score:3, Insightful)

    by stevejsmith ( 614145 ) on Sunday May 22, 2005 @02:39PM (#12606012) Homepage
    Does anyone else find it bizarre that throughout the article they keep telling us how old everyone is? And that they tell us twice that this "Parsons" fellow is 57? Why in the hell are the ages -57 and 50, extraordinarily normal ages for executives -of these people at all significant??
  • by FlyByPC ( 841016 ) on Sunday May 22, 2005 @02:44PM (#12606036) Homepage
    Speaking as an aviation enthusiast, I hope they start the spin too low and too slow!
    • In case anyone doesn't get it, if you try a barrel roll in an aeroplane if you're too low and you roll too slowly, you crash and burn. When your 'foil is perpendicular to the horizon you aren't really generating any lift, so gravity pulls you down.
  • The way this article is written, it seems as if AOL bought Time Warner, and now Time Warner is spinning off its parent company. This is confusing. It, in fact, took a few minutes of online research to find that the AOL and Time Warner thing was, in fact, a merger.

    Still quite confusing, though. The two companies were never meant to become one. Their business models are too different.

  • Profit? (Score:4, Funny)

    by russotto ( 537200 ) on Sunday May 22, 2005 @02:46PM (#12606044) Journal
    Is it possible to buy short into an IPO?
    • Of course. You just have to be well connected. (This was the first thing I thought of too, but I'm not connected enough to make it happen)
  • AOL has been dragging TW downhill ever since they merged.
    I look forward to the day when my RoadRunner no longer goes thru 3-5 extra hops in the ATDN.net network to get anywhere.
    Pre-merger; 10-14 hops to anywhere in the world.
    Currently; 15-18 hops, even inside the US.

    And on a more personal note, I'm about to start working for TW, so it'll be nice not to have the AOL baggage.
    • I was just about to comment on that until I saw your post... I remember way back in 2000 when I got RR service that traffic was routed pretty well. Not long after the merger, EVERYTHING started going through ATDN and my ping times rose considerably, mainly in the evening.
  • by coupland ( 160334 ) * <dchase@hotmailCHEETAH.com minus cat> on Sunday May 22, 2005 @03:06PM (#12606129) Journal
    If AOL makes enough money with their IPO, maybe they can afford to buy a big media company. :P
  • Now AOL can go off and die on it's own without hurting TimeWarner...
  • The Time-Warner guys never like the AOL guys and AOL swallowed a company too bigger than it could handle. Time-Warner is just getting rid of them.
  • Mozilla.org was started by AOL's Netscape division, as I recall. Are they now independently supported, or will they go under when AOL does?

    The great irony is that AOL, rather than go head to head with MS, continued to use internet explorer browser even after they bought Netscape. The world said "Huh?" Then they supported and continued Netscape's early experiment with open-sourcing the browser and we now have the very successful Mozilla and Firefox browsers, esp. Firefox, that may be eating away at MS's
    • The Mozilla Foundation is a completely independent entity and no longer has ties to AOL/Netscape other than the fact that (I belive) a lot of coders are employed by time-warner.

      http://www.mozilla.org/foundation/ [mozilla.org]
    • "The great irony is that AOL, rather than go head to head with MS, continued to use internet explorer browser even after they bought Netscape. The world said "Huh?"

      Do you think AOL will continue to be part of the default Windows install if they go all-Firefox? They'd have little to gain and almost everything to lose if they drop MS like that.

      If anything, incorporating the whole MSIE engine in Netscape 8.0 may be a sign that Netscape itself (if not Firefox-branded) will be a part of the default AOL insta
  • As a seperate entity, they will be forced to take more risks, forcing them to innovate more. Combined with TW, they could afford to stagnate alot longer.

    I look forward to seeing what shifts in company direction come out of this. Right now they are just playing catchup in all areas with the real innovators in the industry.
  • by supabeast! ( 84658 ) on Sunday May 22, 2005 @03:39PM (#12606306)
    In the years since the AOL/TW merger/buyout the two companies have had numerous chances to unite their collective business models. How hard would it really be to turn AOL into a subcription service that provides access to a massive amount of content - magazines, books, music, television, movies - with tiered access options, one of which would include the old AOL ISP service? Success would be almost guaranteed, after all, the two companies had some of the best marketing departments in the world, given that they both made the majority of their money by convincing people to spend billions of dollars on overpriced entertainment.

    This has to be the biggest missed opportunity of all time. If the shareholders were smart they would sieze this last chance to revolt, replace the board with people who have spines, and fire the entirety of the AOL/TW senior management, replacing them with some visionaries who actually deserve to handling a company with so many great possibilities, and not a bunch of worthless cowards afraid to transform the company into the world's first digital entertainment empire.

    • Time Warner could just as easily do this on its own. The only thing AOL would offer is a crappy dialup ISP, which is dying. Time Warner, on the other hand, has a cable devision, and could easily over broadband in place of AOL. AOL is nothing but a burden.
    • after all, the two companies had some of the best marketing departments in the world,

      [*nods*]

      Yep, AOL had the "give away junk disks by mail" market *cornered*.

      :)

      hawk, who found it hysterical when his XP installation disk resurfaced, after his wife mistook it for a coaster

  • BetaNews ran a story about this, which says that Time Warner had considered spinning off AOL but decided that "it would be unnecessary to do so at this time."

    "'Right now AOL is currently integrated into our operations,' Time Warner CEO Dick Parsons said. 'But if it gets to the point where consolidation is happening in the Internet space and, in order to play most efficiently, we need ... our own currency, the possibility [of an initial public offering] is out there.'"

    Story at: http://www.betanews.com/ar [betanews.com]

  • by IGnatius T Foobar ( 4328 ) on Sunday May 22, 2005 @04:28PM (#12606595) Homepage Journal
    Time Warner is the worst thing that ever happened to AOL. Yes, you heard me right. The moment Parsons stepped in, AOL lost its soul. Parsons was more than happy to sell out to Microsoft, putting the final nail in Netscape's coffin and killing off the possibility of a future in which tens of millions of AOL subscribers would have a Gecko-based browser embedded in their client software. If it weren't for TW and Parsons, IE's market share might be somewhere around 50-60% today.

    I'd love to see AOL spun off, and Steve Case put back at the helm. I'd love to see Bill Gates dartboards put back in place at AOL. I'd love to see a plucky independent AOL taking stabs at Microsoft on a daily basis again. Let's see it happen. If this breakup happens, as far as I'm concerned it'll be good riddance to Time Warner.
    • What soul?

      I agree it would be nice to see AOL take a chunk or two out of MS's hide, but I doubt that will happen. AOL is a middleman, and if there's one thing that technology's drive to efficiency hates is middlemen.

      There is content, there are content users. Anything that gets between those two will eventually be pushed aside.

      RS

  • Synergy! (Score:3, Interesting)

    by rlp ( 11898 ) on Sunday May 22, 2005 @04:42PM (#12606671)
    The merger was done with promises of amazing synergy. Here's what TW looks like today:

    • AOL - losing market share
    • Publishing (Time, People, etc.) - losing market share
    • The WB (TV) - yeah, right!
    • Movies - 'Harry Potter' did well, but 'Troy', 'Oceans 12', 'Polar Express'??? New Line Cinema did Rings Trilogy
    • CNN - losing market share
    • TW Cable - seriously kicking Telco butt!


    So you have a bunch of disjoint units some doing well and some doing poorly. Were I a shareholder I'd want to see the whole thing broken up.
    • Funny how you disparage all of Time-Warner, yet you don't back it up by any numbers. 2004 was Time-Warner's strongest year ever, all while paying down debt. Look at the numbers. I guess they're doing something right.
      • Read it again - some divisions are doing very well, some have serious problems. TW is a conglomerate of different uncoordinated businesses. Shareholders don't seem to be gaining anything by having them under one common corporate umbrella. The promised 'synergy' has not been realized. Broken up, some will excel and some will sink, but shareholders will have much more visibility as to which are the stars and which are the dogs, and can adjust their holdings accordingly.
  • I say good! I've been afraid ever since the merger they'd make Road Runner users like me use there God aweful software.
  • I hear the Canopy group is looking at aquiring controlling interest in AOL; Web Browsing licences will only be $699 if you buy them before they file suit.
  • Compaq to spin off HP... you read it here first.
  • was heard from Bugs, Bats, Supes and Cartoon fans all over the world.

    I was just waiting for the Superhero Themed AOL "Browser".
    Always did give me a shiver.
    AOL owns Batman?, Superman, Bugs, Daffy, and no not FogHorn Leghorn? NooooOOooooooOooo

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