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Time Warner

Submitted by lasmacka on June 7, 2005

Category: Business
Words: 765 | Pages: 4
Views: 290
Popularity Rank: 47,825
Average Member Grade: N/A (Add a Comment / Grade this Paper)

In January 2000, AOL and Time Warner announced a record setting $166 Billion Dollar merger. Referred to as "the Deal of the Century" the talk immediately centered on the potential synergies the new company would realize.

Steve Case, announced as Chairman, championed the idea of AOL/Time Warner as the "Wal-Mart" of the media and entertainment industry – a one-stop shop marketplace for advertisers to reach their audience. Case envisioned fully integrated advertising campaigns with bundled AOL/Time Warner products.

The idea was simple enough: through a single point of contact, a marketer like Pepsi could get product placement in a major event movie, run a sweepstakes promotion on the web with the winner appearing in a Warner Brothers sitcom, sponsor a Warner Music artist's concert tour and distribute a national print and television branding campaign.

Investors applauded.

AOL/Time Warner's scale & scope would give it a clear advantage over stand alone competitors.

Furthermore, with the integration of Time Warner, AOL, the leading ISP, with 40% of the US market, would be able to differentiate its products with proprietary content from such established brands as People Magazine and Sports Illustrated.

Time Warner executives, in turn, saw AOL as a new distribution pipeline into consumer households that could be used to promote and extend their collection of brands.

The deal seemed to make sense for both sides.

So what went wrong?

The big question these days is: Should Time Warner sell AOL? Is the company stronger together or apart? Over the past year, analysts, investors and company executives have grappled with this issue.

Since it helps to understand a company's past when making a decision about its future, we have structured this presentation in the following format:

First we will briefly review...

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