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AOL To Be Purchased By T-Online?
Sique writes "The german newspaper Sueddeutsche Zeitung reports on its website, that the german ISP T-Online wants to buy AOL. The article is titled American Dream, but the actual wording is german. Ask the fish for help." There's also the article in Der Spiegel about the potential purchase as well; you can also check out T-Online's site.
This isn't surprising considering that they just dropped AOL from the "AOL Time Warner name.
Life is the leading cause of death in America.
According to Heise online this has already been denied by T-Online (sorry, German only).
Basically, what they are saying in that news article is that some spokesman from T-Online claims buying AOL would be "economical nonsense". But T-Online has about 4 billion Euro cash with which they'd like to buy some companies. And while T-Online is the biggest online provider of Europe it is largely unknown outside of Europe, thus buying AOL would make sense to some people because T-Online likes to expand and conquer markets outside of Europe.
by yours truly... in a rush so don't complain if it's not 100% accurate (apologies for the dodgy english as well):
"American Dream"
T-online has lots of money and high ambitions, one option is the take-over of AOL
For years it was a duel that electrified the internet public. Deutsche Telekom with T-online vs. the conqueror from the US: AOL.
The opponents used all means to fight for markets in europe, including law-suits, dumping prices and advertising campaigns. A Particular twist was added when the (german) media company Bertelsman headed by Thomas Middelhoff, worked together with the Americans.
Today, all has changed. Since Spring 2000 Bertelsmann is not involved with AOL anymore and Middelhoff is a partner with Investcorp in London.
He searches for investment opportunities in the entire world and has particularly good contacts to the US, where he is on the board of the NYT. From the deals of the 90s he still knows many people at Time Warner, who euphorically bought AOL 4 years ago but is now unhappy with the online-business.
Time Warner already dropped AOL from the name and are apparently thinking of seeling large parts of the company. The most likely candidate is according to sources of the SZ the T-online AG who has been striving for international expansion for a while, but not achieved its aims in this area.
One idea is for the germans to hold 80% of AOL shares while 30% stay with Time Warner, a cooperation that would change the media-landscape. It would happen due to the deal-making of Middelhoff.
It is the old Bertelsmann Boss and now Investment banker who has aided the talks between T-online and Time-Warner. Information from T-online sources suggest that a meeting between TW boss Richard PArsons and T-online Boss Thomas Holtrop has already occured.
The suggested price-tag is ~1 Bn Dollars. That's a long way away from the former astronomical valuations of the company once promoted by Middelhoff friend Steve Case.
At it's maximum AOL bought Time Warner for 112 Bn Dollar. Recently AOL lost customers, currently there are about 25 Million.
It woudl be easy for Holtorp and Col to pay for the deal. T-online still has 4 Bn Euros. This capital needs a targe so that publicly traded T-online corp can achieve its ambitious growth targets.
Middelhoff was not available for comment. A t-online spokes-person didn't want to commen on the rumours: "Every quarter we're asked "What are you doing with your money?"
Fundamentally there are two major parts of strategy. One is inorganic growth, by purchases and by waiting on consolidation of the market,.
A deal with AOL would have the particular advantage that T-online would get a foot-hold in the american market. Co-operations with sister-firm T-mobile are important as the companies work together on "T-Zones" where T-online supplise contents, which could be important for the US investments of T-mobile.
The Project AOL is top secret. A final decision has not been made. There are risks, in particular in terms of regulators. In Germany AOL never made major inroads. It is likely that after a merger AOL germany would disappear.
On Tuesday T-online has declared a quarterly profit for the first time. T-online now has 12.9 Mn customers, 9% more than last year. 4/5 of these live in Germany, so it's time for a jump. Yes, t-online is on the look-out says Holtrop, and it would not be years until he has something to announce...
Does anyone know if these companies (T-Online and T-Mobile) are related?
Yepp. Both companies are part of Deutsche Telekom. (T-Mobile 100%, T-Online 75%).
See the Deutsche Telekom site for more info.
.. in English. See it here
So it appears we have an official denial now (as reported by Forbes this morning).
The only reason that Germany has maintained its manufacturing sector is through the use of technology and robotics. Otherwise, the cost of labor would be prohibitive. Same reason why Japan and German companies have car factories in the United States, we're their Mexico so to speak because its cheaper here in the United States.
Also, Voicestream (now T-Mobile) here in the United States has been nothing but a loser for the telecom giant. But that's okay because of the German 15-year outlook in business. American businesses, as a result of our finicial markets, are too focused on next quarter results. Let's say a company spends a large amount on R&D or marketing that will not see results for months if not even years and looses a bunch of money for a few quarters, the CEO is at a high risk of being fired. That is why many choose to cut R&D and marketing. The first move will shoot themselves in the foot, often not apparent for a number of years, the other might hurt them if they were spending more than was necessary on marketing, which is easy to do. Even as a small business owner, a $5000 marketing budget can go rather quickly for a quarter. However, with a 15 year goal of x, if there are some off years to reach that goal, its not a big of a deal.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
Now they're in decline. Why would anyone want to acquire them, except as a distressed company? Their "content"? Yeah, right.