"They've gotta either spin it off or sell it, and there are no buyers for it, so it's got to be spun off," says Mark Edmiston, managing director of AdMedia Partners.

Reed Phillips, managing partner at DeSilva & Phillips, agrees, though with a qualification. "It depends on what their horizon is," he says. "A spin-off is the most likely outcome in the next year or the next six months." After that, he says, the M&A environment should be sufficiently recovered that a sale will be possible.

Keeping Time Inc.'s current leadership in place gives Time Warner extra flexibility to choose between those courses of action, says Mike Vorhaus, president of Magid Advisors. "I think if anything this is probably a reflection that they're going to give themselves time to do this," he says. "It probably has to do with when they think they can get a fair price."

Phillips believes renewing Moore's contract may be less telling than another executive move Time Inc. made this week: reassigning senior vice president John Squires, who had been running the news and business group (which includes Time and Fortune magazines), "to develop a strategy for the portable digital world and to refine our views on paid content."

"That's exactly what a buyer will be focused on," says Phillips. "That's probably the most important thing they'll be looking at."

Edmiston, meanwhile, suspects that Moore may not serve out her full term if the spin-off he expects comes to pass. "If I were spinning it off, I'd want to have somebody in there with experience running a public company," he says. "Ann doesn't have that. She's always been a division head."