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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
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Do you mean to tell me that you have the naivete to believe that the core of AOL wasn't an outdated business model when this merger happened?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.
1 Time Warner AOL merger of negative shareholder value is worth 14.3 Carly Fiorinas.
Nerd rage is the funniest rage.
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.
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
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.
Time Warner didn't "merge AOL into it", AOL merged Time Warner into AOL. AOL bought Time Warner, not the other way around.
There were several online services in dial up days. Originally, none of them were connected to the Internet. People who had different online services couldn't exchange email. There was Compuserve (the uber-Geek network), there was Prodigy (for not completely geek early adopters), and AOL (for everybody else). OK there were a couple of others, but you get the idea. You could only access content on the service you paid for. You could only send email on the same service. If you were on Compuserve and your friend was on Prodigy, no email between you.
AOL was the only one of these to truly make a profit. When AOL bought Time Warner, the latter was struggling with their business model in the new age of the Internet. The people who were the target market for the other online services saw that the writing was on the wall for AOL (partly because those services had already succumbed for the most part), but they had been saying that since 1994 and AOL had only gotten bigger and richer since then.
The advent of high speed Internet put the final nail in AOL's coffin, not even buying Time Warner could save it.
I'd forgotten how complicated this whole story was. There is about three more paragraphs of explanation, but I will stop here.
The truth is that all men having power ought to be mistrusted. James Madison
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.
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.
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"
Sup, dawg! We heard you like buzzwords, so we put a framework in your immersion so you can leverage while you enterprise.
"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.