• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The AOL-Time Warner Story – A Case of Need

Extracts from this document...


The AOL-Time Warner Story - A Case of Need The AOL - Time Warner merger is the biggest to date and had worldwide implications. This paper will look at; the what, how and why behind the alliance, hereby referred to as a merger* even though it had the traits of a takeover. In the analysis we will be looking at the companies backgrounds thus understanding the need for the merger and the implications of such a large merger. Media companies distribute information content through its many 'channels' that are television and print. Occasionally new technology opens up new possibilities to distribute the information, the latest being the internet and before that cable. Time Warner (TW) took on a huge burden of debt during the 1990s upgrading it's cable networks, a smart move considering cable is perceived as the best way of piping broadband Internet services. The Internet competes with other media for people's attention; it is thus a threat and an opportunity that old media companies feel that they cannot ignore. Struggling to acquire customers, the Internet companies have discovered the importance of the real world. Promotion on a broadcast-television network can pull in new users, but it is pricey: establishing a new brand through television advertising costs �15m-30m in the first months. ...read more.


AOL is a portal but unlike Yahoo it operates on a subscriber basis and progressing this point further - it has 20 million of them. This goes some way at creating loyalty to the company. With TW, AOL will also have further advantage over the other portals quite simply because it will get noticed more. This is seen as so important that Internet companies' desperate need for promotion has been the basis of many old-and-new media alliances. Finally, the last point of 'video' TW has a substantial cable layout in the US. This is why AOL needed a large media company. The Economist also recognised another problem as being that of "economies of scale." Instead of the above two options AOL decided TW to be it's best suitor and as a result other big media companies must be concerned because there is only one AOL but there are many big media companies. Conclusion AOL and analysts began to recognise that it was a vulnerable enterprise. One that was dangerously dependent during the highly competitive time (that is now) when many other firms are offering free Internet access. This along with the AT&T threat of restricted cable access meant AOL needed to secure its future. ...read more.


AOL Properties Possibilities with Time Warner ISP AOL's online service, Netscape, Compuserve, MovieFone, Instant Messenger. Speedier Internet and interactive TV services using Time Warner's cable lines. Appendix item 1.1 Source: TIME magazine (Jan 2000) and The Economist (Feb 2000) Date Old Media Company New Media Company Details February 1999 USA Networks Lycos Merges with USA Networks subsidiary January 1999 News Corps Yahoo Cross-promotion January 1999 CBS AOL CBS to provide AOL news October 1998 Bertelsmann Barnesandnoble.com Bertelsmann buys 50% August 1998 USA Networks CitySearch Merges with USA Networks subsidiary June 1998 Walt Disney Infoseek Disney buys 43% of Infoseek June 1998 NBC Snap NBC buys 19% of Snap March 1997 CBS SportsLineUSA CBS buys 11% of SportsLine March1997 NBC Microsoft Joint Venture Appendix Item 1.2 Source: Various Company Reports/Economist -"Do they have anything in common?" - Feb 11th 1999 * "the term 'merger' is generally used to include both mutual agreements and acquisitions" - Economics Third Edition John Sloman - 8.2 Alternative Maximising Theories page 223. � The Economist - Do they have anything in common? - Feb 11th 1999 � "the voluntary union of two companies where they think they will do better by amalgamating." Economics 6th Edition David Begg - Industry policy and competition policy (pg305) � The Economist - "Do they have anything in common" - Feb 11th 1999 ?? ?? ?? ?? - 1 - ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Internet section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Internet essays

  1. This essay critically discusses the social issue of homelessness and its impact on young ...

    26 per cent of homeless MEG use hostels and bed-and-breakfast accommodation; this proportion increased to 44 per cent of 16 to 17year-olds and 38 per cent of those were under 25 (Anderson, Kemp and Quilgars, 1993) (in Somerville, 2001). The BBC No Homes Series (2006)

  2. In assessing the competitive position of a large online trader, we would use the ...

    Countries 66.4 % 333,845,940 502,738,100 IWS - Sept.30/04 Rest of the World 8.1 % 479,085,652 5,887,409,387 IWS - Sept.30/04 Total World Penetration 12.7 % 812,931,592 6,390,147,487 IWS - Sept.30/04 Source: http://www.internetworldstats.com Internet user's history DATE NUMBER OF USERS % WORLD POPULATION INFORMATION SOURCE December, 1995 16 millions 0.4 % IDC

  1. E-commerce Technology

    * Secure certificates (security) * Catalogue and Shopping Carts * Implementation Summary At present eCommerce is widely spreading in the UK and a lot of businesses are adopting the online service to improve customer services, communication and improve turnover. This section has reviewed eCommerce and its impact to many organisations.

  2. Critically analyse and evaluate current developments in consumer behaviour in relation to one transport ...

    "...it is always smart to keep in mind that advice from family or friends is a huge influencer in buying decisions". (Strategic Action Resource 2003) Strategic Action Resource quoted in 2003 that it is important for the operators to keep in mind that the consumer's decisions also rely on families and friends when buying holidays.

  1. online services

    be sure they are legitimate > you have to wait for the product to be delivered, depending on where its coming from it could take a long time > to try and win the bid you have to keep on checking the status on if your bid has been beaten

  2. Moral panics – video nasties

    This was because the trial judge, who sentenced Venebles and Thompson to be "detained at Her Majesty's Pleasure", unusually made a statement in open court claiming that he believed violent videos may in part be an explanation to why the boys committed murder.

  1. ICT - services

    Drawbacks There are also drawbacks to Amazon: * The first main drawback has to be fraud. This happens on any online shopping website you use simply because all details are given to Amazon and it's really whether you can trust the company or not.

  2. What are the possibilities of and obstacles to the development of global online communication?

    as liberalisation * Globalisation as universalisation * Globalisation as westernisation/modernisation * Globalisation as deterritoralisation Although all these definitions are related back to the issue of globalisation in some way, it is the 'Globalisation of universalisation' that is predominantly concerned with global online communication.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work