TW Spinning AOL Out

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

TW Spinning AOL Out

January of 2000 CNN announced: "In a stunning development, America Online Inc. announced plans to acquire Time Warner Inc. for roughly $182 billion in stock and debt Monday, creating a digital media powerhouse with the potential to reach every American in one form or another."

This morning, over 9 years later, TW is spinning AOL out, according to CNN, a TW company.

Steve Case on Twitter had a lot to say about AOL: "AOL Spin-Off Approved Last Night By Time Warner Board: http://bit.ly/ThYkx. My perspective on AOL & Time Warner: has been a long, tortuous journey - and after a difficult decade, its time to open new chapter. Merger could've been transformative: driven convergence of TV/Internet/phone, ushered in digital music & video, etc."

I have to agree there. There were culture wars between the AOL employees and the TW employees, a classic case of old media versus new media mindsets. At the time, all I thought was that AOL was going to become THE place on the web. Pay your $10 per month and access all of TW Media like Time magazine, People, etc.; see movie trailers; get CNN breaking news. None of that happened. It had all that content to work with and absolutely no idea what to do with it. It didn't even have a Broadband play - even though TW owned Road Runner at the time.

Back to Steve Case: "But synergy didn't happen. Didn't integrate businesses to drive innovation. Lots of missed opportunities. Glad breakup now finally happening. Agree w/ TW CEO Jeff Bewkes, it is best for AOL and for TW. AOL not what it was a decade ago, to be sure. Uphill battle to return to greatness. But doable. Wish the team at AOL the very best!"

Case added: "Thomas Edison: "Vision without execution is hallucination" - pretty much sums up AOL/TW - failure of leadership (myself included). Resigned as Chairman 6+ years ago, left Board soon after, urged company to go left or go right, integrate or liberate."

AOL-TW wasn't the only big merger that didn't enjoy the synergies: VZ-MCI, HP-Compaq, DEC-Compaq, and so many others. Heck, AT&T is one umbrella with seven separate companies un-integrated under it, much like Level3. So mergers look good on paper - and the money looks great to the shareholders, bankers, and execs, but I don't know any that have worked out. It usually leads to short term monetary gains for a few and a big mess for the rest. It creates no ultimate value.

What will AOL do as a stand-alone company? Ride the dial-up cash cow, while figuring out the advertising network model, I guess.

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