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Time Warner To Spin Off AOL
Hugh Pickens writes "Time Warner is inching closer to untangling one of the worst mergers in American corporate history that began with the merger of Time Warner with America Online, a deal that has resulted in the evaporation of more than $100 billion of shareholder value. "Although the company's board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner's stockholders, in one or a series of transactions," Time Warner said in the filing. Tech industry analysts have speculated for years that Time Warner would spin off AOL; the two companies merged in 2001 with the idea that AOL's strengths as a new media company could benefit an old media company like Time Warner, and vice versa. But few synergies ever arose from the marriage and even AOL founder Steve Case, who is no longer with the company, has said that he believes the two companies should be separated."
Do I hear any bids?
Please don't say "synergies." It makes me cry a little.
There's no -1 for "I don't get it."
Into oblivion, I presume?
Brett
Will I still get my AOL discs in the mail? I almost have enough to make a solar parabolic amplifier death ray.
We are Dead Stars looking back Up at the Sky
...will get a large stack of free AOL CDs.
I don't believe that for one moment. The writing was on the wall for AOL anyways, and for much of Time Warner as well. Had they not merged, they still would have lost about the same amount between them. To think otherwise - to agree with the above quote - is to somehow believe that AOL would still be what it was in 1996, when they were providing dialup for millions, which is just silly.
'nuff said.
Some days it's just not worth
chewing through my restraints.
Do you mean to tell me that you have the naivete to believe that the core of AOL wasn't an outdated business model when this merger happened? Face it. Turner didn't have a clue what he was doing, and he bought a timed bomb for which there was no way to disarm the fuze.
Ah, the joys of market bubbles. Seriously, this was primarily a Time Warner stumble. If I remember correctly, AOL was worth more than Time Warner at the time of the merger. Hence, "AOL Time Warner." In retrospect, that was ludicrous. It would have made as much sense for Time Warner to have changed it's name to "Time Warner.com" or something idiotic like that. It seemed that the most mundane business models, or no business models at all, were getting VC money because "it uses the internet." This, and the current recession, both serve to illustrate that business leaders often behave stupidly and are susceptible to hype.
Steve Case saved shareholder value for his AOL shareholders, the only people to whom he owed any duty. If, I don't know, Microsoft and GM were to merge, smart money would bet on Microsoft shareholders losing a LOT of money, but I would suspect GM's shareholders would be pretty happy with the deal. It all depends on how you define the loser.
Make love, not reality television.
Ah, the joys of market bubbles. Seriously, this was primarily a Time Warner stumble. If I remember correctly, AOL was worth more than Time Warner at the time of the merger. Hence, "AOL Time Warner." In retrospect, that was ludicrous. It would have made as much sense for Time Warner to have changed it's name to "Time Warner.com" or something idiotic like that. It seemed that the most mundane business models, or no business models at all, were getting VC money because "it uses the internet." This, and the current recession, both serve to illustrate that business leaders often behave stupidly and are susceptible to hype.
Steve Case saved shareholder value for his AOL shareholders, the only people to whom he owed any duty. If, I don't know, Microsoft and GM were to merge, smart money would bet on Microsoft shareholders losing a LOT of money, but I would suspect GM's shareholders would be pretty happy with the deal. It all depends on how you define the loser.
Make love, not reality television.
1 Time Warner AOL merger of negative shareholder value is worth 14.3 Carly Fiorinas.
Nerd rage is the funniest rage.
didn't the same thing happen there?
I mean, like you couldn't see that coming. AOL only had relevance when there was still a big dial-up business. They were a media company only in the sense that they were adept at scraping an eclectic batch of content from other sources and surrounding them with blocky, juvenile graphics.
Broadband to the home made AOL redundant. Without Time Warner to prop it up, AOL would have ceased to exist years ago.
Or, maybe not... I am continually astonished at the number of people with cable or DSL to their home who think they need a third-party ISP on top of the ISP they already have, by definition, with their broadband service. In that respect, AOL has been a marketing phenomenon, continuing to sell services long after those services became largely unnecessary. But that's not a sustainable business model. (Nor is making it as difficult as possible to quit.)
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
AOL Acquires Time Warner in Largest Ever Expenditure of Pretend Internet Money
Step into a huge movement. Don't Tread In Me.
Seriously, does anyone really care? Timewarner is sucking pretty bad, and is there anyone that still uses the "new media" of AOL?
The musings of just another geek and his junk.
The book 'There Must be a Pony in Here Somewhere' is a great read about this whole debacle.
To spoil the title, it's about how a small pile of steaming horsecrap is just a pile of steaming horsecrap, but if you get a HUGE pile of it, then start digging, because there must be a pony in here somewhere. At least that was Time Warner's theory.
http://www.amazon.com/There-Must-Pony-Here-Somewhere/dp/1400049644/
Comment removed based on user account deletion
I wasn't as read up on the "business world" when this happened, but why did a company like Time Warner merge AOL into it? What value did they see then when their subscription base was starting to dwindle at around the same time?
AOL? What's AOL?
cost too mutch
it suck
no good
send to many disk.
Me and my friends took a bisk and lit it on fire and froze it slamed it angaisnt the boor.
(Incidentally, why has this vanished from Google? It's not even in the groups/dejanews archive anymore).
By concentrating as much sucktitude in one place as possible to stop it spreading throughout the rest of the sector. That's why when Mozilla started showing signs that it might actually deliver something worthwhile it was set free to avoid breaking from AOL's aim of "sucking big time".
Boffoonery - downloadable Comedy Benefit for Bletchley Park
Microsoft could buy AOL and merge it with MSN.
AT&T could buy out AOL and merge it with their ISPS and Yahoo.
Oracle could buy out AOL and merge it with Sun, and port the AOL software to Solaris and SunOS.
Google could buy out AOL and turn it into GOL or Google Online.
Nobody can buy out AOL and let them go into bankruptcy with all of their debt.
AOL was a crappy ISP with bloatware for their connection software. Almost every service that AOL provides one can get for free or almost free on the Internet. Before the Internet explosion, AOL was something like Prodigy, CompuServe, et al because there was no world wide web. I can remember when AOL was Commodore 64 GEOS based, before it was ported to Windows and the Mac.
The best part of AOL was Netscape, but they even got rid of that.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
Obligatory, classic Onion story.
AOL based their entire business on local dial up and they had no plan for transitioning to broadband. Any fool can see that in 2009 and their valuation at the time of the merger looks silly in hindsight.
Where do we see the same thing today? How about Twitter and Facebook? We've detected some outrageous valuations but there is no plan for either to move to becoming a self sustaining business.
Let 'em die. AOL has done far too many disservices to the internet for any sympathy to be forthcoming.
mod parent up
You are completely right, but they never would have changed their name to "Time Warner.com or something idiotic like that". I don't think that "dot com" really meant anything to them; they really didn't understand how the world was changing. They were stuck on the AOL way of doing things, which was most definitely NOT "dot com".
Part of that whole mess was just raw psychology: hubris, blindness, old fogeyism, and getting run over by the bullet train of market reality. In the period circa 1998 - 2001, Win 98, Internet Explorer, DSL, cable broadband, and the dotcom boom all turned the world en masse to the real Internet. While AOL saw opportunities in the Internet, it was so tied to its own version of online services, a glorified dialup bulletin board service, that it never saw where the rest of the world had suddenly detoured to. The AOL - Time Warner merger came after the ascendency of AOL, as they were starting to become irrelevant.
Hubris - thinking that flash-in-the-pan AOL could take the leadership role from well-established and dependable multimedia Time-Warner. Blindness - letting their hubris and rose-colored vision mask what was happening with the real Internet and ISPs. Old fogeyism - believing that their traditional ways would prevail, as the whole world was giving up roller skates for sports cars.
Not surprisingly in retrospect, but perhaps not predictable at the time, is that consumer tastes in the media itself changed. Time Magazine and Turner Classic Movies remain important, but who then necessarily realized that the likes of YouTube, FaceBook, the blogosphere, and all of their forebears of the time would divert attention from classic print and TV media.
At that time, they just didn't get it, what "dot com" was really all about. They were all going to lose value anyway, but kudos to Steve Case for sucking something out of the stodgy and clueless old guard - like it or hate it, you gotta admire it.
Thing is, I remember when it was first announced thinking that if it gave AOL access to Time Warner's content it was a great idea. But the thing is, it never really did. In the end none of Time Warner's companies ever really put their content out there (Standard MPAA/RIAA fears) and so AOL never got any content out of it. So while the merger had potential, neither side took any advantage of it at all. Now AOL is just a ISP basically, and Time Warner is still just another content provider trying to cling to the old ways while they figure out what this Internet thing is.
I did some research into this, and despite growing costs, Facebook claims to be cashflow positive, which surprised me. So maybe they will make it.
Same can't be said for Twitter, which at the moment has exactly $0 revenue, and is proud of it. Idiots.
Qxe4
Perhaps everyone is missing the important asset here: AOL Instant Messenger. It's still the leader in instant messaging. I'll bet Microsoft would love to force-march the AIM user base to "Windows Live Instant Messenger" (or whatever they call it).
For a monopolist with a war-chest full of cash like Microsoft, it's worth buying AOL and throwing the rest of the company away just to get AIM users.
Tired of FB/Google censorship? Visit UNCENSORED!
AOL based their entire business on local dial up and they had no plan for transitioning to broadband. Any fool can see that in 2009 and their valuation at the time of the merger looks silly in hindsight.
Dude, I know hindsight is 20/20, but everyone except Time Warner executives knew the merger was a bad idea back in 2000. Another person above posted this article from The Onion from back then.
I remember every single person I knew going, "what the fuck?" when we heard of the merger. It was 2000! I was wasn't exactly living in an urban metropolis, but I already had had access to broadband for over a year. Everyone knew AOL was going to crumble and quick.
have you seen the throne?
Help stamp out iliturcy.
"Time Warner To Spin Off AOL" is a nice way to put it.
A more descriptive, and accurate, title would be:
"Time Warner Shits Out AOL Tapeworm".
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
"(Incidentally, why has this vanished from Google? It's not even in the groups/dejanews archive anymore)."
"Don't be evil"?
Some days it's just not worth
chewing through my restraints.
1. buy AOL stock 2. sell it as toilet paper 3. Profit!!!
The MAFIAA is a bunch of mindless jerks who will be the first up against the wall when the revolution comes
What I don't get is that in every circle I knew the AOL had been mud for a long, long long time. How disconnected from the real world do you have to be to merge with this turd of a company that everyone was cheering all the way to the bankruptcy courts? AOL was akin to some sort of naive ponzi scheme, its viability so dependent on easy-new subscribers that they probably have printed more CDs than Sony Music by now. It's just ridiculous. Back then AOL subscribers were like people still watching black & white movies without words in the year 2000 because they didn't know color 'talkies' existed.
Now, let's talk about the next big companies I want to fail, here's the top of my list:
- Sony (largely a has-been)
- Microsoft (could take awhile)
- GM (let it die, for god's sake)
- Citigroup ($1 per share = lols)
- Al Gore's media channel (he invented the internet)
- T-Mobile (horrible coverage)
- I would put Apple on here, but the iPod redeemed them in my eyes \ I broke down and bought one, and it works fairly well.
Anyone got any I missed that need to be aded to the list?
"I Don't Have Enough Faith to be an Atheist"
Synergie is a tecnical word. It has a precise tecnical meaning. Your whine is like a bussines type saying "please don't say Bytecode!". Synergie mean (I will try to make a definition here, even with my horrible english skills. Oh.. and my knowgment of that tecnical word is also weak) a byproduct of a fusion of two companys, this byproduct is a change of the production of the company.. it could be positive (the resulting company product more than the original two) or negative, product less than the original. A split, like that we have here, could have a positive synergie: both companies produce more separated (maybe the burocrazy costs will be smaller on AOL, so it will be easier to make money now)
I hate U.
-Woof woof woof!
Sup, dawg! We heard you like buzzwords, so we put a framework in your immersion so you can leverage while you enterprise.
I think Twitter and Facebook are a little bit different. They have already shown that they are willing to adapt and change over time by adding new services and features. AOL, as you have mentioned, seemed to have no intention of transitioning to broadband.
I don't know about everyone else, but there's a decent chance I'd stop using AIM if the two merged. I can't stand MSN/Windows Messenger. I use Pidgin anyway, but if I had to jump through any hoops at all during the transition, I'd just give up altogether.
The confidence of ignorance will always overcome the indecision of knowledge.
The man makes a good point. I almost forgot that every time I open Adium, I'm really using an AOL service. Almost.
When I did freelance tech support, I had a couple of elderly clients who used AOL for email. I don't know what they'll do if the service simply disappears.
Perhaps everyone is missing the important asset here: AOL Instant Messenger.
I was just thinking, if AOL went out of business, what would happen to my AIM account? I decided I would just use the Facebook messenger. All of my friends are on it, and I already have an account. Why use anything else?
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
AOL only leads in the US and nowhere else.
IIRC, the only reason AIM is open is because of antitrust concerns born of the merger. So something good may have come of it. But I wonder what will happen to AIM if AOL fails.
http://news.cnet.com/Commentary-Taking-AIM-at-AOL/2009-1023_3-268050.html
http://www.articlearchives.com/law-legal-system/antitrust-trade-law/555912-1.html
http://windowsitpro.com/article/articleid/26010/aol-reneges-on-aim-interoperability-promise.html
Neither company really knew what to do with the other. It was a bad merger but could have been great if only they'd had less clueless management. The only thing they looked at was subscriber base and thought that somehow that would be all they needed.
AOL could have evolved into Facebook or MySpace with a re-branding effort and a move to less proprietary hardware/software. They were stuck with their own homegrown stuff... look at Facebook which started as a ColdFusion application and has since moved on (or was it MySpace that was CF? oh well).
In any case they needed to open up to the developer community and let people use their platform as a tool, rather than feeling the need to roll out features themselves. They missed the web 2.0 bus so to speak by not providing an API.
A fool throws a stone into a well and a thousand sages can not remove it.
For AOL shareholders, it should go down as one of the best mergers in US corporate history. They got to trade a shrinking pile of bits and bytes for 1/2 of a real company.
"Time Warner is inching closer to untangling one of the worst mergers in American corporate history that began with the merger of Time Warner with America Online, a deal that has resulted in the evaporation of more than $100 billion of shareholder value."
This sentence deserves some untangling of its own...
There's a 68.71% chance you're right.
**** So easy to use, no wonder it's number one? **
What happened to that?
Oh yea.. They can't even afford commercials anymore. That's what!
Did the AOL guys really think dial-up would live forever? Yes, I know some people are still using it. But the technology will eventually forced out of the door. This is especially true when technologies forever-continue to develop that require far faster internet access than dial up.. When half-duplex cable, ISDN and other similar technologies begin arising AOL brushed it off as insignificant. Now they are being brushed off as insignificant all together.
-and as far as this website goes calling non-registered users Anonymous Cowards. Blow me. I'm too lazy to sign up for a website I don't consider worth my time for me to be a "member". If I sign up for every site that ask; or God forbid, requires it I'll join the crowd of millions of annoyed users that agree it's redundant to do so for a single ( or occasional ) post. To have to log in or let alone sign up every annoying damned time is cheezy to say the very LEAST. This site is one of tens of thousands that has such literally reasonless ( on the users end and of security wise ) policies. And the number is ever growing.
What if I had to log in every visit to the grocery store, or gas station or to use the toilet? It's not like I am checking my email or purchasing something with a credit card. Therefor it is NOT for security purposes. PFfft.. Ok, so I am an anonymous coward.. WooHOooOO!! Call me A.C. then.