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Time Warner says farewell to AOL
Nearly a decade after first announcing plans to join forces in a $164 billion deal, Time Warner’s relationship with AOL is soon coming to a close. The two giants officially merged in 2001 with the idea that AOL’s strengths as a new media company along with its massive customer base could benefit an old media company like Time Warner, and vice versa. Things didn’t quite work out as planned, however.
Citing things like falling ad revenue and declining subscriptions, Time Warner has confirmed plans to to spin off the AOL branch for good and let the company make its own decisions. The news comes as no real surprise given the history of the merger, which showed its first signs of trouble several years ago when Time Warner began the process of selling it off, at least internationally, to French communications giant Neuf Cegetel.
They also hinted at the possibility of a spin off several times in the past few months. It is clear to them that there's no chance of turning AOL around to make a profit, or at least no chance of them being willing to invest more into the troubled company. With little broadband infrastructure of their own, relying primarily on a few popular (yet unprofitable) online services, there’s little room for them to roam. Is the end of AOL near?
Citing things like falling ad revenue and declining subscriptions, Time Warner has confirmed plans to to spin off the AOL branch for good and let the company make its own decisions. The news comes as no real surprise given the history of the merger, which showed its first signs of trouble several years ago when Time Warner began the process of selling it off, at least internationally, to French communications giant Neuf Cegetel.
They also hinted at the possibility of a spin off several times in the past few months. It is clear to them that there's no chance of turning AOL around to make a profit, or at least no chance of them being willing to invest more into the troubled company. With little broadband infrastructure of their own, relying primarily on a few popular (yet unprofitable) online services, there’s little room for them to roam. Is the end of AOL near?
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User Comments (4)
Post a comment| fastvince on April 29, 2009 1:29 PM | I knew back then this would not work. Two totally different
cultures. I guess they had to try it though, else they would
always wonder what might have been.
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| tengeta on April 29, 2009 4:21 PM | AOL made Microsoft look like a bunch of care bears hanging
out on a rainbow. You lose customers when they finally get a better... or actual second choice.
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| Julio on April 29, 2009 6:57 PM | Time Warner was prey to the explosive but decadent business
plan that AOL had at the time, let alone today.
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| DarkCobra on April 30, 2009 2:19 PM | I too thought this was a marriage made in hell when if first
happened. The weak link in the chain was AOL. The only
question now that remains is what will be the future of the
once mighty AOL. I'm afraid it's not going to be pretty or
take very long.
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