ABC, CNN on hold

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AOL Time Warner Inc. CEO Richard Parsons confirmed Tuesday that his company and
The Walt Disney Co. have "hit the pause button" indefinitely on talks concerning a merger of
Cable News Network and ABC News. He also said some AOL Time Warner "noncore" assets will soon be in
play.

In theory, both sides like the concept of operating a merged ABC News/CNN
entity, Parsons said, citing NBC News, where there is one big newsgathering
apparatus feeding material to cable channels and a broadcast network.

But short of merging AOL Time Warner and Disney (which, he stressed, is not on
the table), what the companies haven't figured out is how both units can control
their own air and manage the overall entity at the same time.

Also, if a venture were to be crafted with one newsgathering operation
servicing both the broadcast and cable channels, Parsons said, the question of
how, or even if, it could be undone if it failed to live up to expectations
remains open. Until those questions get answered, he added, there
wouldn't be any point in resuming talks.

Parsons made his remarks at the UBS Warburg LLC media conference in New York.

He also said that as part of an effort to shore up the company's balance
sheet, executives are now putting together a list of noncore assets that the
company will consider selling. Parsons didn't identify specific properties, but
he stressed that America Online Inc. wasn't one of them. Job one with AOL is to fix it, he said, adding,
"Fixing it requires content creation, the company's strong suit."

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