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(AOL – Time Warner) is Bull June 4, 2006

Posted by rajAT in aol, media, media2.0, warner.

Once touted as the mother of all mergers has been called a "Bull" by the president of Time Warner, Jeffrey Bewkes. The merger was the talk of the town in 1999. Everybody that includes all media gurus, business analysts were thrilled about this marriage. Wall Street has given the green signal by pushing the stock of the concerned entities. Those were the days of bubble. Steve Case was a hero, a new media mogul. It was said that now they own up both content (Time Warner) and distribution (AOL), they are going to sweep the market. But it all turned out to be a "Bull".

Fast forward to 2006. The synergies between the two entities (AOL-Time Warner) never took off. Blame it on technology or on people who dont want to see a choppy video on internet. What they want really want is a painless experience.
And now Time Warner has abandoned all pretense of "synergy" between its various media divisions, the failed concept that was the sole justification for its merger with AOL.

But if AOL is such a big load for Time Warner then why dont they sell that part of that business. AOL, last month has also launched a clone of YouTube known as UnCut. Does this give a signal about the differences between the two managements?

In fact the latest trend is that big content owners like Disney, ESPN, CNN have no plans to partner with internet giants (Google, Yahoo) for distributing their content. It was back in bubble when internet was considered a rocket science. But not now. Moreover, the CEO of Yahoo, Terry Semel, is not even a tech guy but a media person. All big media houses have their own internet strategies. Infact they are thinking beyond internet and very aggressive in mobile space also. This was shown by series of announcements of MVNOs – ESPN mobile, Disney Mobile etc.

This all, only shows that media industry is in a big flux. Only time will tell which marriage was "Made in Heaven". 🙂



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