NEW YORK (CNN/Money) - Time Warner is considering spinning off Internet service provider America Online in combination with its cable operations, according to a published report Wednesday.

The world's largest media conglomerate has been planning to issue a minority stake in Time Warner Cable, the nation's No. 2 cable operator, for several years. According to the New York Post, the company is now considering including AOL with Time Warner Cable when that stock issue occurs.

A company spokesman denied the report.

"We're not considering spinning off AOL or combining it with our cable company," the spokesman told the Post. "The company is supportive of AOL's strategy to monetize its significant Web presence."

At this year's shareholders meeting, Time Warner (Research) Chairman and CEO Richard Parsons said the company had looked at a possible sale of shares of AOL but decided it wasn't necessary. He said such a move was looked at as a way to give AOL a currency it could use to purchase other Internet companies. Time Warner Cable plans to use its shares to purchase assets of bankrupt cable operator Adelphia Communications.

The Post says two sources close to the company say the possibility of combining AOL and Time Warner Cable as a single company is just one of many Time Warner is considering for the future of AOL.

AOL is still the world's largest Internet service, and while it has continued to lose customers using its traditional dial-up service, it has continued to post large profits. Rising advertising revenue is making up for much of the loss of subscription revenue.

AOL is in the process of launching a revamped version of its Internet portal, a move that would offer any Web user some of the content it previously provided only to its subscribers. The change is part of an effort to increase revenue from the fast-growing online ad market and move away from its declining subscription base.

Parsons told Fortune magazine in May that Time Warner would consider spinning off AOL if that strategy fails to live up to expectations. Time Warner would still control the unit under that scenario, the article said.

A spin-off of AOL would undo one of the bigger and least successful corporate mergers in history. America Online purchased Time Warner in a deal that closed in January 2001. But the share value of the combined company plunged after the deal closed and the expected efficiencies between the old and new media never lived up to expectations.

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For more on AOL's plans to change itself more into a Web portal, click here.