AOL Time Warner in bruises

Well, two lions can’t live in the same den. Amongst a plethora of billion dollar deals struck across sectors, there lies a tale of doom of biggest merger ever in the media industry. It all started with a landmark takeover bid by AOL to acquire Time Warner in 2000. Ever since the duo has measured crests and troughs but couldn't rise the tide up. It was in the dotcom huzzle buzzle, AOL shopped unworthy and expensive. It was Time Warner’s blind luck to be associated with one of media giants with widespread online presence. AOL bartered its million subscribers for the rich content. Their marriage had a lovely honeymoon, but dial up internet obsolescence led to a gob smacking $99 billion loss in 2002. AOL dominant market share evaporated in the air of high speed internet. The internet bubble swept away 90% of the value for old Time Warner shareholders. Though this deal was smartly sought by AOL, but untimely, which made it the worst merger ever.

AOL Time Warner could never hold the pieces of the maze in place and the company altogether was fragile for hostile takeovers from even larger sharks.

Their ideologies, business practices never fell in synch, which resulted in a cascade of purges. Two hands may not always be able clap together. In 2003, Time Warner shedded off its music division and consequently a divorce with AOL was executed. AOL initially bought Time Warner for $165 billion and later was itself sold to Verizon for mere $4 billion. This merger is a classic example of how ‘transient advantage’ can come as a blessing for one and curse for another. A small technological transformation made a $350 Billion company see doldrums. Steve Case, founder of AOL, on the spin off of AOL and Time Warner said, “Vision without execution is hallucination”.