The Time Warner board has approved spinning off AOL into a privately traded company, undoing, AdAge reports, “the disastrous merger between the two in 2001, which came to be a symbol of failed synergy between content and web distribution.”

The spinoff will happen at the end of 2009, and meanwhile, AOL will continue its reorganization. CEO Tim Armstrong is “reported to be knitting AOL’s major units tighter together and re-emphasizing the AOL brand.”

No word on what will happen with MediaGlow but we’d be surprised if the company didn’t continue to expand its content channels.