Exploring the Digital Age
On January 10, 2000, the largest merger in history was conducted between Time Warner and American Online. On a surface level, this merger could be seen in light of its combined resources, or even its large market value. However, the merger between these two companies has repercussions in the life of every person who uses the Internet. Undoubtedly, the Internet has emerged as a leading technology poised to change the way the world will revolve. The Internet has ushered in the Digital Age where information is king and mass customization is possible. Even the current economy, investors have recognized this and are heavily investing in companies that are a part of this Information Technology Industry.
The logic of any merger is that with its combined resources, the new company would be able to exploit opportunities that by itself it would not be able to. Many companies in history have missed these opportunities and have paid dearly for it. IBM, for instance, lost its position as a market leader when it failed to understand the potential of the personal computer. Xerox did not recognize the potential of a graphical user interface. Both these companies are examples of successful firms that missed the imminent arrival of a technology, and the prospect of taking advantage of the opportunities created by it. However, AOL made significant steps to acquire Time Warner, and through its strategic moves, it has shown clearly that it understands the significance of the emerging Internet technology. The merger of AOL Time Warner is still currently in the process of being fulfilled. Through the analysis done of the merger, and of the individual organization and their past mergers, it is likely that the AOL Time Warner merger will, in time, prove to be a successful move by both companies.
America Online—Context, Structure, Performance
In order to predict the outcome of the merger, it is important to look at each organization separately. America Online incorporated under its original founding name, Quantum Computer Services, in May of 1985. After its first online service, "Q-Link" was launched on Commodore business machines, AOL went on to launch America Online for DOS, Macintosh, Apple II, and Windows. Over the next decade, it went on to acquire many Internet-related companies, from developers of Internet applications to Internet publishers. AOL also launched its services in Australia, Japan, the UK, and many other countries across the world. By March of 2000, America Online’s membership surpassed 22 million.
America Online’s most recent business strategy, "AOL Anywhere," is to make AOL's industry-leading brands, services, and features available to consumers across a range of products and devices. Through its services, millions of consumers will be able to access popular AOL features whenever and wherever they need them: from the Web, the television, Internet-ready phones, handheld computers, and others personal...