Aol Time Warner And Harley Davidson

881 words - 4 pages

AOL Time Warner: Deal of the Century Turns into Disaster of a Lifetime (Bovée/ThillMescon, 2007)AOL acquired larger Time Warner in 2001, in a merger valued at over $180 billion (USD) and tagged the “deal of the century”. The merger was the first between a traditional media giant and a new media-internet giant and had a significant impact on a variety of different industries including e-commerce, magazine publishing, music and the media industry as a whole. (Eunjung/Dugan, 2000)“AOL Chairman and CEO Steve Case … described the upshot of the merger this way: "We're going to map out a route to the promised land."” (Dembeck/Caswell, 2000)The merger gave AOL access to Time Warner’s broadband assets to squelch pressure for AOL to move from phone-line to broadband, and gave Time Warner immediate marketing and advertising access to AOL’s online audience of over 20 million users. (Dembeck/Caswell, 2000)“When the merger was announced, analysts believed that Time Warner's music, movies and magazines along with its cable systems would speed up AOL's transition from phone dial-up to broadband, and that AOL's Internet mentality would accelerate growth at Time Warner. Neither has occurred.” (Case, 2005)Challenges faced by the merged companies included a dysfunctional integration to form ‘one’ company, as each division just “did its own thing.” (Case, 2005) stifling innovation; turf wars were the focus instead of moving forward; and personality clashes overshadowed each step forward. Additionally, along with the slump of the economy and a significant reduction in advertising revenues, the merger led to significant layoffs of employees in the first 1-2 years.Finally, an investigation into the company’s finances resulted in approximately $500 million in fines, and within a few years of the merger, the ‘deal of the century’ was seen as an utter failure, ultimately leading to Time Warner dropping AOL from it’s name and changing it’s stock ticker symbol. (Case, 2005) (Sorkin/Kirkpatrick, 2003) (Bovée/ThillMescon, 2007)Executive management at the merged AOL Time Warner has changed a number of times since the merger. Stephen Case who founded AOL and captained the merger of the two companies, resigned as Chairman of the Board a couple of years after the merger and resigned from the Board in 2005. Gerald Levin, CEO of Time Warner at the time of the merger, retired six months after the merger was finale, and Robert Pittman, Levin’s successor, left the company after only a few years at its helm. (The Associated Press, 2005)In a 2005 article Steve Case wrote for the Washington Post, he simply stated “…it's now my view that it would be best to "undo" the merger by splitting Time Warner … and allowing AOL to set off on its own path.” (Case, 2005) AOL and Time Warner both had a tremendous amount to offer each other to forge a new path in the...

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