Crawford’s thinking: After Time Warner ditches AOL, which is scheduled for a spinoff later this year, the company will ditch its magazine business as well. That will leave it with a portfolio made up only of a movie studio and cable networks, and a big cash pile to play with.

Time Warner won’t comment, but I’m sure the company has heard Crawford make this prediction before. His Capital Research Global Investors owns more than eight percent of Time Warner shares, which means he gets plenty of access to Bewkes and his lieutenants.

But here’s the thing: The body language from Time Warner executives in recent months makes me think they intend to keep at least part of their magazine business in the family. More than body language, actually: “Time Warner without People? I can’t imagine it,” one well-placed Time Warner official told me recently.

That said, I won’t be surprised if the publisher employs fewer people, producing fewer magazines in the future.

Time Warner officials have repeatedly said that Time Inc. has too many titles: The magazine unit publishes 23 magazines in the U.S. How many can you name? And last year’s mass layoffs, while unprecedented for the publisher, were still fairly modest compared to other publishers’ cuts. The six percent reduction left Time Inc. with some 9,400 people on the payroll.

But executives at the publisher love to stress, off the record, that its flagship titles–Time, People and Sports Illustrated–are each on track to generate millions of dollars of profit this year, even though ad pages and revenue are down. And while Time Inc. certainly hasn’t figured out its digital business yet, at least some of its print properties could and should do well on the Web, as People.com is already doing.

There are certainly assets that Bewkes and company could dispose of fairly easily. For instance, its U.K.-based IPC Media unit, which handles many of the 90-plus titles it publishes outside the U.S., is frequently brought up as a sale candidate. But I’d be surprised if he got rid of Time Inc. and its iconic brands altogether.

For the record, here’s how Time Inc. performed in the first half of the year. The company has already said it expects similar numbers for the remainder of 2009 (click table below to enlarge).

While it’s true that Time Warner’s (TWX) magazine unit is embattled, there are bright spots in the portfolio. Take People.com: The gossip magazine has always been one of Time’s strongest performers (good luck trying to find a discounted subscription). Now its companion Web site is, too.

The site boasts 8.6 million unique monthly visitors, per comScore (SCOR), up 36 percent in the last year, and generates a staggering 700 million page views per month–per Omniture (OMTR). Meanwhile, once-hot sites like TMZ.com (another Time Warner property) have tailed off.

Much of the credit for that goes to Mark Golin, the awesomely sharp and frumpy editor best known as the man behind Maxim magazine’s rise, way back in the late 1990s. He’s successfully broadened the site beyond just Britney/Paris/Lindsay news by adding features like a game channel, a shopping channel and the like.

One of the most successful expansions came via acquisition: When People.com bought Celebrity Baby Blog back in May, it was generating 6.9 million page views per month. Now it’s doing 30 million, Time execs say. And before my fellow journobloggers dismiss the work that the people at Celebrity Baby Blog do, ask yourself this: Did you know that Ashlee Simpson has named her kid Bronx Mowgli? Aren’t you glad you know now?

In any case, all those page views are translating into actual dollars–not digital pennies, as NBC’s Jeff Zucker would say. Time Inc. says People.com is now one of its 10 most profitable titles–that’s out of all of the company’s 174 properties, on or offline.

The company won’t attach numbers to that claim, of course. But given that Time Inc. generated $162 million in operating profit during a very lousy third quarter, you can get some sense of the property’s success. Now Time just needs many more just like it.

That will change beginning next week, says Time Inc. spokeswoman Dawn Bridges. She says CEO Ann Moore (right) and her lieutenants will unveil the “size, staffing and structure of each of the business units” beginning “early next week.”

Unfortunately, that still doesn’t mean that Time Inc. workers will all learn their fate at the same time. A person familiar with the plans tells me the re-org could take a couple weeks to roll out.

Also fuzzy: The number of people who are going to get cut. The 600 number The New York Times reported last month is a ballpark estimate, I’m told. Time is telling individual unit managers to reduce overall payroll, but they’ll have autonomy to make the cuts themselves.

A reasonable but completely unverified hunch: People who work at SI.com, People.com and CNNMoney.com may be in better shape than their colleagues. Those three sites were singled out as top performers during Time Warner’s earnings release this morning, in which the company said the magazine publisher’s overall revenues had dropped seven percent and that ad sales had declined eight percent in the last quarter.

Know more? Let me know: peter@allthingsd.com.

This isn’t a total shock. The previous quarter, AOL had only been able to manage two percent advertising growth, and the company had already signaled since then that both its display ad business and its ad network were struggling. But given that these results cover the three-month period that ended Sept. 30, which only included a couple weeks of flat-out economic collapse, there will be worse news in store for the last quarter of the year.

Total revenues at the unit, owned by Time Warner (TWX), dropped 17 percent, to $1 billion. The bulk of that is attributable to its declining (down 26 percent) subscription business, so that number is less relevant–except to whoever may be in the market for one or both parts of the unit, like Yahoo (YHOO). Things would have been even worse, by the way, if AOL’s paid-search business hadn’t ticked up.

Overall results at Time Warner were flat for the year, with revenues of $11.7 billion and earnings of 30 cents per share. CEO Jeff Bewkes also announced that 2008 earnings would be lower than previously forecast due to restructuring charges, but that cash flow would actually be higher than the company had predicted.

Revenues at its to-be-shrunk Time Inc. publishing unit dropped seven percent, pushed down by an eight percent drop in ad revenue. The good news is that online revenues of $13 million, driven primarily by SI.com, People.com and CNNMoney.com, helped cushion some of the blow. The bad news is that those numbers are down from $19 million in the previous quarter.

Other results:

• Cable: Revenues up eight percent; adjusted operating income up nine percent.
• Movies: Revenues nine percent (“The Dark Knight” did great, but not as well as “Harry Potter,” “Rush Hour 3″ and “Hairspray” last year).
• Cable TV networks: Revenues up seven percent. Both subscription fees and ad revenues were up.

One of note for MediaMemo readers: The departure of Ned Desmond, a longtime Time Inc. vet who was most recent title was President of Time Inc. Interactive. Ned’s bio is here; nice-to-know-you memo from Ann Moore follows:

To:        Time Inc. Employees

A.M.                 J.S.