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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.
If this is more than an American Dream, let's hope that an outcome will be that AOL will loosen their grip on the IM market. The closed model they've been trying to enforce has been holding back a world of possibilities for Jabber and IM client development.
Running AOL's profit/loss statements and investor reports through The Fish are about the only thing that could explain someone actually -wanting- AOL right now...
About the only thing I've ever found The Fish useful for was once confusing the crap out of a friend visiting Italy by making her think I 'spoke' formal Italian. That was good for a few days before another friend spoiled it and told her...
Please help metamoderate.
T-online is a publicly traded company that was spun off from Deutsche Telekom. ~80% of the shares are still owned by Deutsche Telekom. The article claims T-online has 4 Bn. Euros in cash reserves, which would be more than enough to buy AOL.
I'm not sure the European authorities would block the deal as T-online so far is almost completely restricted to activity in Germany while AOL has very few customers there, so a merger would not change the diversity in any market significantly... but it's still a big risk...
f I remember correctly, T-Online is owned by Deutsche Telekom
;)
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Right.
While T-Online is profitable, Deutsche Telekom is not...
Wrong. Deutsche Telekom [which has the 4 divisions T-Online (Internet), T-Mobile (cell phone service), T-Com (fixed line service, basically the German fixed line network), and T-Systems (something like extended IT services)] is quite profitable right now. They still have huge amount of depths though from the times they purchased expensive 3G UMTS licenses and bought Voicestream for a huge load of money. But they are strongly reducing that depths, and the company is profitable. Actually, the just released their financial statement for the first 9 months of this year today (www.telekom3.de/en-p/inve/2-bu/cont/2003/thir/03
Why would anyone want to buy AOL after when Time Warner dropped AOL from it's name? I thought it was already a fact that AOL isn't making money.
Well, first off, T-Online sure is making money and this whould be a way of buying a huge amount of customers. T-Online wants to grow and will have a hard time doing so by just attracting new customers, must people are online somewhere allready, so it's either convincing people to switch to T-Online wich will costs loads of marketing money and will require massive infrastructure investments, or buying those customers. The article talks about a price of 1 billion dollar. For 25 million customers plus the infrastrucure to support them plus a very well known brand name this might be a good purchase. Just compare the price of 40 dollar per customer to a 'Switch now, get the first 6 months for free' campain...
Secondly, T-Online has money to burn, so they can afford to take some time to turn it into a profitable company, starting by dumping all personnel that will be 'duplicate' when the two company's merge.
One problem with these figures is the exchange rate between Euro and the US$. 18 months ago, when one Euro was 0.86 US$, your figures were "correct".
Nowadays one Euro is woth about 1.15 US$. Suddenly the GDP measured in US$ per capita jumped up nearly 30%. So did germany close the gap while being in recession? No!
Another problem about the GDP is that the US (AFAIK) gives it an uplift due to the quality increase. This isn't done in Europe.
Regards, Martin
P.S. Let's not play "my ecconomy is bigger than yours". For my part, there are a lot of things, i think the US is doing better. But there are a lot of things too, i consider worse.
Disclosure: I work for a telecom company with a pretty successful ISP and wireless unit that obviously competes with both T-Mobile and AOL. This is my personal opinion, though, and I don't represent it as being that of my employer.
These two fit together well, if for no other reason than that they're both pretty bad about responding to security complaints. T-Online is notorious as a simultaneous source of scanning/exploit activity and a sink for abuse reports. AOL doesn't fare much better. Also, they'll probably end up keeping the brand name AOL since most of their customers could be easily confused by that sort of switch (most still don't know that Voicestream got bought by T-Mobile). So the sum effect of this would be that another company gets owned by Deutsche Telekom. Works for me: when I tell friends who really owns T-Mobile, more than one has decided they'd like to go with a domestic provider, even if it's not my employer.
My real question is, will Catherine Zeta Jones be in the new commercials? :)
"You can never have too many elephants on your team."
True, but then again the British national hobby IS to put down the Germans at every opportunity. If you read The Economist regularly, when reporting on the German economy, if they left out the name of the country you'd get the impression they're talking about some inconsequential two-bit Third World country. Don't get me wrong, no one is harder on themselves than the Germans (just read Der Spiegel and you want to slash your wrists over all the doom and gloom), but it's kind of ironic that the ones pointing their fingers the most are those with their own fair share of problems.
So Britain went for the quick fix short term gains by throwing pretty much their entire social net out the window in the image of their masters across the pond. The Germans OTOH in their typical stubbornness and reluctance to change cling on to their economic model from the '80s, leading to respective blips and dips in the growth charts. Still, they're aware that change is required. I'd say wait another ten years before gloating. The '90s are hardly a solid economic barometer, lots of wanky business went on there (ahem, AOL?!). Besides, sooner or later the outrageous British defence spending is going to come home to roost. I'd say in the not-too-distant future "Operation Freedom" will show up as a big fat dip in the British bottom line, and some politicians will get a fair spanking.
From what I understand, T is a German telecom monopoly. It's not really surprising that they are expanding their market into America since they already have a regulated hold on their native country.
I for one welcome our new German overlords.