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Aol, Time Warner Case Study

713 words - 3 pages

AOL.Time Warner 1Anne FossKaplan UniversityNovember 16, 2004Management Policy and StrategiesMT-401-01Lesson Project 7Professor EdmondsonAOL, Time WarnerAOL, Time Warner 2AOL (American on Line) went public in 1992 with just $27 Million in revenues and only about 200,000 subscribers. Time Warner was founded in 1923 it was a vast seller of magazines, film, music, and TV broadcasting. In January of 2000 the two companies merged and became AOL Time Warner (AOL TW). This merger was valued at $156Billion and was one of the largest ever.This merger took over a year to close. They had to deal with a range of difficult antitrust issues. Then AOL's shares dropped from $68 to $47 this was due to the economy. (Yang 2000 pg 36-38)The best strength they had was, when they merged together they created a business that was into a vast majority of small business. Time Warner was a vertical company that expanded into TV, magazines, films, music. Their growth was expanding out and not upwards. AOL was in my opinion a horizontal company that was in expand up with the new age of computers.With this they are able to feed off one another. AOL is able to use Time Warner cable side to offer their customers faster web service. This made AOL then, the king of the internet. This brought in CNN, CNN News clips and others for a premium prices. With the help of Time Warner who had cable AOL was able to expand into DSL and Satellite systems. This in turn increase Time Warner's with customers who would receive an enhancing service provider. Together the two have together over 100 million subscribers.AOL, Time Warner 3(Yang, 2000 pg 36-38)With the great expectations of growth and profit they to me did not take inconsideration of what direction the economy might or might not go. They had slow advertising in 2001 this was due to the recession. This is a weakness in any type of advertising. In 2000 they had a surge of 9.6 percent then it dropped to 5.4 in 2001. This is where their customers slowed business. They depend on upon advertising spending for a good portion of...

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