[opendtv] Re: News: How the AOL-Time Warner Merger Went So Wrong
- From: Tom Barry <trbarry@xxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 11 Jan 2010 08:59:44 -0500
I think the following small quote from the article pretty much sums it up:
------------------------
In fact, Mr. Case and his team, including Robert W. Pittman
<http://topics.nytimes.com/top/reference/timestopics/people/p/robert_w_pittman/index.html?inline=nyt-per>,
the company’s president, had been plotting for months about how to use
its high-priced stock to make a big acquisition. The company hired the
investment bank Salomon Smith Barney, and its top media banker Eduardo
Mestre, to consider various targets.
-------------------------
At the time of the merger many of us in the computer business were
already calling AOL "Internet with training wheels". The writing was on
the wall for the decline in dial-up access. I assume Mr. Case also knew
that and his team basically just had a better crystal ball about how
overinflated the AOL stock price really was. So they hired an
investment bank and made a deal with TW at that ridiculously high
price. Mr. Levin and TW had much less understanding of where things
were going with the Internet and I believe got sold some Internet swamp
land, with a bridge thrown in.
- Tom
Craig Birkmaier wrote:
> IN RETROSPECT
> How the AOL-Time Warner Merger Went So Wrong
>
> An interesting interview/read in the NYT this morning about the failed
> AOL/TW merger.
>
> http://www.nytimes.com/2010/01/11/business/media/11merger.html?pagewanted=1&th&emc=th
>
>
> At the time of the merger I was enamored with Steve Case and believed
> he might be able to pull this whole thing together. I should have
> known better!
>
> I had just lived through the experience of putting the ATSC standard
> together and experienced first hand the massive distrust between the
> traditional media industries and those upstarts in the computer and IT
> industries. The transition to digital and the growth of this thing
> called the Internet scared the *$#* out of the TV industry folks who
> were already reeling from the changes brought about by cable and DBS.
>
> Guys like Ted Turner were changing TV land, allowing Time Warner to
> grow into a conglomerate with equal footing to the broadcast networks.
> Case and his vision never stood a chance against the TW empire, which
> refused buy into the new Internet culture.
>
> Bluntly stated: The TV guys believed they could control this new
> Internet beast.
>
> To a certain degree they have succeeded, especially with respect to
> the DRM wars.
>
> But Levin may have it right in the conclusion to the story linked above:
>
> "I think it's something that no one could have foreseen, and to this
> day, whether Apple is going to dominate entertainment or whether
> Amazon is going to dominate publishing, all the old business plans are
> out the window. How do you get paid for content? And the consumer has
> access to everything and now it's going to be on a handheld device, so
> what I call the rolling thunder of the Internet started actually to
> eat its own, which was AOL. AOL was the Google of its time. It was how
> you got to the Internet, but it was using some old media business
> ideas that were undone by the Internet itself, and that's why Google
> came along."
>
> Now the Internet is eating the media conglomerates too...
>
> Turns out that the TV guys had a bit more staying power, but the "same
> old media business ideas" that allowed TW to fend off the changes that
> Case wanted to pursue are starting to crumble in the face of anywhere,
> anytime...
>
> Regards
> Craig
>
>
>
>
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