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Time Warner To Be Split Into Four Parts?

Posted by Zonk on from the baby-warners dept.

Shakrai writes "CNN Money is running a story titled Icahn eyes Time Warner break-up. Carl Icahn is a fairly well known investor who is pushing to break the Time Warner empire into at least four different business units. While his motivation seems to stem from business interests -- he thinks it will work out better for Time Warner in the long run -- I thought it raised an interesting point of discussion. Will the vertically integrated media empires that control content creation, content distribution, internet access and the news media become the Ma Bells of the 21st century? What can be done to protect consumers without stifling the technological innovation that we all know is so important?"

4 of 107 comments (clear)

  1. Weird by FST · · Score: 4, Interesting

    Does anyone else find it weird that just a few years ago, big mergers were all the rage and "synergy" was the magic buzzword in corporate America and on Wall Street. So why are so many companies now rushing to get unhitched? Also, is this outbreak of corporate divorces good for shareholders, or should I sell my stocks now?

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    1. Re:Weird by faqmaster · · Score: 3, Interesting

      Seems to be a natural cycle - intergrate, disintegrate. At an abstract level (the level that the board members or uber-investors look at) the four areas mentioned in the writeup look like they have a lot in common and would benefit from integration. So someone puts them all together by talking up this thing called synergy. Only then do they see that the specific methods that each of those entities use to implement their functions are very different and in some cases incompatible.

      I mean, if you didn't know anything about how each of those areas worked, it would seem logical to think there's a natural flow from production to distribution to access (and news reporting is just a specialized version of that whole process). But, there's a reason Wal-Mart doesn't manufacture anything, and there's a reason that factories in China don't have retail stores here in the US.

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  2. What will happen to the Netscape Divison ? by axonis · · Score: 5, Interesting

    I guess if AOL is going to be set free, and probably aquired, Netscape will also suffer its final fait too... i can imagine that it will evntually get killed off , marking the end of a once great Internet company.

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  3. Not so weird by canuck57 · · Score: 5, Interesting

    Does anyone else find it weird that just a few years ago, big mergers were all the rage and "synergy" was the magic buzzword in corporate America and on Wall Street.

    Not really so weird. Boards and execs have little to do but cook up a buy, merger or divestiture. It is self justification for their existance. But what a waste of money.

    The truth is the rich at the top want to keep one part of the company and cash out another and now realize the merger was stupid. My guess is AOL has been loosing too many customers under the new management and instead of dealing with the synergy and management issues they are going to cut AOL back out on their own.

    It is too bad short term greed and short sightedness were not the only traights you need on a good board of directors, if so America would be rich.