Reports indicate that talks between Time Warner (TWX) and several technology industry giants regarding an online partnership with America Online have heated up in recent days. Some are speculating that a deal could value the entire AOL division at $20 billion. So what does TWX stock do yesterday on this news? It drops 2%, which can be attributed in part to the news that Yahoo and Microsoft are linking accessibility to their instant message programs.

Time Warner itself is valued at slightly more than $80 billion, with the AOL subsidiary widely considered dead as far as online innovation is concerned. And yet, reports of a deal are indicating that AOL might be worth 25% of Time Warner's total valuation. If true, TWX's current share price hardly makes sense to me. At $17, TWX repreesnts a wonderful value in a market that has been, to borrow a Jim Cramer term, a "house of pain." If investors are looking for good deals with limited downside, Time Warner shares looks like a solid bet.