Mergers come and go, usually helping the economy grow or helping companies grow to a bigger and better corporation.
Mergers come and go, usually helping the economy grow or helping companies grow to a bigger and better corporation. A merger is defined as a union between two or more commercial interests or corporations. Mergers have many positive effects on the economy, yet sometimes they could have some nasty negative effects that affect consumers. Usually two companies will come together and combine both their resources and staff and create one huge company. One of the biggest corporate mergers of history that we will explain is the America Online (AOL) and Time Warner Merger. By providing you the reasons that the merger started, the advantages and disadvantages, and some background information on both groups I hope to give you a better understanding of why merger's occur and what will us the consumer look forward to.First, America Online is one of the biggest Internet programs in the world. It gives its twenty million customer's ways to communicate to other people, and consumers the World Wide Web. It provides such programs as AOL, AOL instant messenger, CompuServe, and ICQ. Steve Case is currently the chairman of the company, and is very enthusiastic about the merger. America Online also currently employs twelve thousand one hundred workers. Having a revenue of $4.8 billion in the fiscal 1999 year, it has said that 1999 was a very successful year (AOL Time Warner Inc. at a Glance 1). Second, Time Warner is one of biggest media programs in the world. Their headquarters are in New York where they currently have seventy thousand employees.
Gerald Levin, presently the chief executive of Time Warner, is very optimistic about the changes of his company. Also Ted Turner, the vice chairman of Time Warner, stated that he is positively certain that the merger between Time Warner and AOL will be a success. Time Warner, having a revenue of $26.8 billion dollars in 1998 and a net income of $168 billion dollars in 1998, states that they are financially doing fine (AOL Time Warner Inc. at a Glance 1). Some of the networks Time Warner owns on television are: HBO, CNN, and TNT. Also, Time Warner owns a ...
This is a preview of the whole essay
Gerald Levin, presently the chief executive of Time Warner, is very optimistic about the changes of his company. Also Ted Turner, the vice chairman of Time Warner, stated that he is positively certain that the merger between Time Warner and AOL will be a success. Time Warner, having a revenue of $26.8 billion dollars in 1998 and a net income of $168 billion dollars in 1998, states that they are financially doing fine (AOL Time Warner Inc. at a Glance 1). Some of the networks Time Warner owns on television are: HBO, CNN, and TNT. Also, Time Warner owns a variety of magazines and entertainment brands such as: Time, People, Fortune, Warner Bros., Warner Music, the WB network, and Looney Tunes (AOL Time Warner Inc. at a Glance 1).America Online and Time Warner, being a huge force in the media and Internet, plans to merge. The merger itself costs the companies $350 billion. The merger was announced on January 10, 2000, and it was because of Steve Case (AOL's chairman) and Gerald Levin (Time Warner's chief executive) who were the initiators of this merger. The new company will be the combination of both AOL and Time Warner, and will hold special features never seen before. The merger itself will create a new company, and that new company's name will be AOL Time Warner Inc. Steve Case has said, "We do believe we're on the path of building what may be the most valuable company and most respected company in the world someday." Steve Case, who will be the chairman of AOL Time Warner Inc., has said, "We certainly hope to lead a whole new era of innovation in our industry." Gerald Levin, who will serve as the chief executive officer of AOL Time Warner Inc, says, "We know Time Warner consumers want choice and innovation in cable internet service, and we are going to deliver it to them-access to AOL." The merger, being announced in January, won't actually merge until late fall of 2000, and it probably will continue through the year 2001 (Megamerger Masters 1). AOL Time Warner Inc. will bring about many combined companies because of the merger. Not only will both companies put together and join their programs, but also they will be bigger and better. AOL Time Warner Inc. is going to house many programs such as: AOL, Time, CNN, CompuServe, Warner Bros., Netscape, Sports Illustrated, People, Home Box Office, ICQ, AOL Instant Messenger, AOL MovieFone, TBS, TNT, Cartoon Network, Digital City, Warner Music Group, Spinner, Winamp, Fortune, AOL.COM, Entertainment Weekly, Looney Tunes, and much more. As you can see that AOL Time Warner Inc. will house more than dozens programs that will become economically efficient and better (America Online and Time Warner will merge…1). Besides the all the companies that are listed below, there are many other advantages for this merger taking place. The advantages of this merger seem bigger than the disadvantages. First of all, the biggest advantage of this merger is better communication for all those who join. The technology will be advanced so much further than many of us ever thought would be possible for one company to manage. With the combination of both the media and Internet we hope by 2001 that many features will be offered to the consumer. This merger will bring a lot more opportunities to its consumers. People will have a variety of stores to shop from, many more channels to choose from, and bigger variety of movies to see. Not only does AOL Time Warner Inc. hope to offer these programs to its consumers, but they hope that more internet shopping and communication could be done through the television. Checking email, Chatting with friends, and shopping on television are just some of the new features that will be available to consumers (America Online and Time Warner announce framework..1). Not only will the companies merge, but their stock, employees, and revenue will be shared also. AOL Time Warner Inc. plans on having the first media and communications company that will be truly powered by the Internet. The company's core attention is planned to be for the success of subscription services, advertising, and commerce. They will serve and offer a broad choice of the best content available, and they say they are willing to meet all of their customer's need, meaning that they are willing to have any and all types of ISP's that their customer's want (America Online and Time Warner announce framework..1). The stock market will greatly benefit from the AOL and Time Warner merger. The Time Warner shareholders will receive 1.5 shares of AOL Time Warner Inc. stock if they continue to invest in the new company. Also, America Online shareholders will receive one share of AOL Time Warner Inc. stock if they continue to invest in the new company. AOL will own approximately 55% of the AOL Time Warner stock, and Time Warner will own approximately 45% of the new company (America Online and Time Warner will merge…1).Many people feel that there are many advantages to the new company, but some agree that this merger has many disadvantages. Many people are afraid that with Time Warner and AOL coming together that it's going to affect consumers and employers. Some of the customers feel that it's going to raise the prices in having all this advanced technology. AOL, currently being $20.00 a month, might increase their monthly rate because of the new technology. Others feel that it's going to put employer's jobs in jeopardy. Another concern is because if these two companies merge, how long will it be until more companies merge in with them and become one huge company (America Online announce framework…1)?In our own opinion, this new merger which is going to take place soon, seems like a good idea for everyone. Updated technology that will increase economic growth is a great idea for our future. Already the features of AOL and Time Warner have taken place to the first step they have done to make this merger happen. In April, AOL has included a Sports Illustrated Swimsuit edition. This is the first step that the two companies have made to make this merger happen.. We think that the merger didn't take place really fast, and that is good because if they made the merger happen in one day then it might be disastrous. We feel that since they are giving the merger happen in one year that they are taking the time to think about what they are doing, and maybe look at all aspects of the merger. Combination of the media and the Internet may be the best thing that we need, it is something that we never experienced yet, and may be something good for our future.