AOL Time Warner
The merger gave Time Warner new platforms for its media properties like Time, People, Fortune, Warner Entertainment, HBO and CNN.
Time Warner gave AOL access to its cable systems, which allowed for “much speedier Internet and interactive television services.”
1) In January of 2000, Time Warner stock sold for $71.88. By 2008 you could buy a share of Time Warner for less than $15. (Slide 14)
2) In 2001, AOL completed its $164bn (£104bn) acquisition of Time Warner, but it soon led to monumental write-downs. However, Time Warner soon realised that the merger was not in its best interests, leading to a loss of $99bn in 2002
1) Height of the “dot-com bubble”, causing huge losses ...view middle of the document...
What Parsons started – a slow unravelling of the merger which began with the removal of the AOL name from the merged business in 2003 – his successor Jeff Bewkes has accelerated in the 22 months he has been chief executive. AOL's subscriber growth slowed to almost nothing, its profits fell by a billion dollars, and millions of people started using broadband, where AOL scarcely has a toehold.
2) The AOL and Time Warner divisions remained at odds with each other and did a poor job integrating their products. Integration did not take place – apart from at a corporate level – and as the various business units continued to stand alone, so the expected financial benefits from merging the two companies did not emerge. Negative synergies even developed, as AOL was held back from getting involved with external providers, in part because of a great suspicion of AOL managers by their Time Warner counterparts who believed they wanted to take over the entire company.
3) Culture Clash
1) More importance is given to real time, high-impact, multimedia news and information services to newspapers by parent company and lesser commercial printing
2) No own brands under publication
3) Being a prime news service, open to backlash and criticism
4) Increasing raw material costs and technological changes
5) Improvement of local players in respective countries grabbing the opportunities
6) Self-Cannibalization through its own advancement of media
M&A will still be the management strategy for media corporations in future and if not
Everyone needs to think carefully about what their function is in the modern world and the value of the activity that you and your company are doing.
Should know their role as technology companies and not content creators