Time Warner To Spin Off AOL 141
Hugh Pickens writes "Time Warner is inching closer to untangling one of the worst mergers in American corporate history that began with the merger of Time Warner with America Online, a deal that has resulted in the evaporation of more than $100 billion of shareholder value. "Although the company's board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner's stockholders, in one or a series of transactions," Time Warner said in the filing. Tech industry analysts have speculated for years that Time Warner would spin off AOL; the two companies merged in 2001 with the idea that AOL's strengths as a new media company could benefit an old media company like Time Warner, and vice versa. But few synergies ever arose from the marriage and even AOL founder Steve Case, who is no longer with the company, has said that he believes the two companies should be separated."
So how much for AOL? (Score:5, Funny)
Typical for samzenpus to accept this story... (Score:5, Insightful)
Do you mean to tell me that you have the naivete to believe that the core of AOL wasn't an outdated business model when this merger happened? Face it. Turner didn't have a clue what he was doing, and he bought a timed bomb for which there was no way to disarm the fuze.
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AOL took over Time Warner, not the other way round.
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Yes, but if Turner and his buddies sold short they probably made out like bandits, lol :P
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When I started work for TW a million years ago, I was sitting in a bar and looked around. I had never noticed how ingrained TW was with everything - Turner's channel was on the TV, a Warner music song was playi
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In special circumstances, we may accept bids in Zimbabwe dollars (small denominations only).
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Ok, I'll start by giving you $100. You can trade that $100 for what's behind Door #1, Door #2, or Door #3. Door #3 it is. Behind Door #1 is a brand new Datsun 280Z. Would you like to switch doors? No? Behind Door #2 is a weeklong trip to West Germany. Your prize behind Door #3 is recently spun off AOL. [Zonk music plays now.] Oh, I'm so sorry. Have a good day. Now I'll offer someone in the audience $100 if they have a hardboiled egg...
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100,000,000 (ONE HUNDRED MILLION)...
...AOL discs!
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You forgot to put your pinky to your mouth
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You can buy the whole company for Free*!
* You'll still have to give them your CC number for identification purposes, of course.
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I'll offer 300
(AOL free trial CDs)
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I have a peso lying around here somewhere...
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AOL UK has already been taken over by Carphone Warehouse. Together with Talk Talk and a few other ISPs they've bought, they are one of the largest in the country.
Synergies (Score:5, Funny)
Please don't say "synergies." It makes me cry a little.
Re:Synergies (Score:5, Funny)
Don't worry, we just need to synchronise your linguistic paradigms with the globalized world to leverage the cost-benefit ratio of using industry standard terminology.
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"monetize" it...
...on Twitter.
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... using cloud computing.
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You need a Web 2.0 paradigm in there somewhere.
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Great! Now you just have to "monetize" it...
BINGO!!!! :)
Re:Synergies (Score:5, Funny)
Don't worry, we just need to synchronise your linguistic paradigms with the globalized world to leverage the cost-benefit ratio of using industry standard terminology.
Fuck, I understood that! On the first read. Gaaaah, they've taken over my brain!
First thing tomorrow at work, I'm gonna find one of the marketing weasels and punch him in the nuts for making me listen to crap like that.
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I'll call his bluff to save your poor marketing guy a trip to the hospital.
Thing is, they DIDN'T syncronise the linguistic paradigms.
AOL Linguistic Paradigm:
"O rly? So teh mArket sux? wHo boUght Who agin?"
TimeWarner Linguistic Paradigm:
"At the time it seemed like the fresh emergence of new ideas would rejuvenate the company. However, that was a mistake. News at 11. Back to you at the desk, sir."
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Bingo!
Sup dawg! (Score:3, Funny)
Sup, dawg! We heard you like buzzwords, so we put a framework in your immersion so you can leverage while you enterprise.
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You, sir, have won the pain game.
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Obligatory:
A few days after the Siemens-Nixdorf merger was announced under the headline "Synergy at Work", two trucks crashed in Hannover on the CeBIT fair grounds.
I was a Siemens and a Nixdorf truck.
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The synergy of our multimedian experience must be conducive to econotric growth.
I knew reading enough webcomic quotes would come in handy some day.
Spin off AOL? (Score:5, Insightful)
Into oblivion, I presume?
Brett
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You forgot spamming copy-n-paste merchants !
You've got Discs (Score:5, Funny)
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Just add a few returned Vista discs. And then target AOL headquarters. :D
Re:You've got Discs (Score:5, Interesting)
I met a man who made Society for Creative Anachronism scale armor out of sliced up AOL disks. I tried it on and got hit a few times: it was surprisingly light and effective armor.
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Here in Taiwan people use old CDs as bike reflectors.
Yeah, but... (Score:2, Interesting)
have you seen the throne? [stupidco.com]
resulted in the evaporation of more than $100B? (Score:5, Insightful)
I don't believe that for one moment. The writing was on the wall for AOL anyways, and for much of Time Warner as well. Had they not merged, they still would have lost about the same amount between them. To think otherwise - to agree with the above quote - is to somehow believe that AOL would still be what it was in 1996, when they were providing dialup for millions, which is just silly.
Re:resulted in the evaporation of more than $100B? (Score:5, Insightful)
I think the idea of the statement was that Time Warner shareholders lost.
Re:resulted in the evaporation of more than $100B? (Score:4, Insightful)
In that sense, the merger was equally the brightest idea ever for AOL shareholders because it "created" $100B of shareholder value for them. I don't think "created value" and "destroyed value" are accurate though; mergers in and of themselves don't actually do much.
Anyways, Time/Warner is mainly a printed media giant, which has been nosediving right along with dialup, so you can't count the entire $100B against AOL.
And even if you did, the full $100B loss would only be for people who only owned Time Warner and not AOL, yet who chose to keep their TW/AOL stock after the acquisition, which seems illogical.
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AOL has already dumped their dialup modem pools, as some of my diehard dialup modem relatives found out, but they managed to make the switch to broadband rather painlessly. All AOL really do now is offer a portal with an E-mail service. Given the competition that Times Warner Cable is facing from other companies, it really looks like AOL is just an overhead on Times Warner's annual financial report.
alt.aol.sucks (Score:5, Funny)
'nuff said.
Aol is sucks!!!!!what you can do with their cd rom (Score:5, Funny)
cost too mutch
it suck
no good
send to many disk.
Me and my friends took a bisk and lit it on fire and froze it slamed it angaisnt the boor.
(Incidentally, why has this vanished from Google? It's not even in the groups/dejanews archive anymore).
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"(Incidentally, why has this vanished from Google? It's not even in the groups/dejanews archive anymore)."
"Don't be evil"?
Lost shareholder value for whom? (Score:5, Insightful)
Ah, the joys of market bubbles. Seriously, this was primarily a Time Warner stumble. If I remember correctly, AOL was worth more than Time Warner at the time of the merger. Hence, "AOL Time Warner." In retrospect, that was ludicrous. It would have made as much sense for Time Warner to have changed it's name to "Time Warner.com" or something idiotic like that. It seemed that the most mundane business models, or no business models at all, were getting VC money because "it uses the internet." This, and the current recession, both serve to illustrate that business leaders often behave stupidly and are susceptible to hype.
Steve Case saved shareholder value for his AOL shareholders, the only people to whom he owed any duty. If, I don't know, Microsoft and GM were to merge, smart money would bet on Microsoft shareholders losing a LOT of money, but I would suspect GM's shareholders would be pretty happy with the deal. It all depends on how you define the loser.
Obligatory Onion article (Score:5, Funny)
Re:Obligatory Onion article (Score:5, Funny)
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AOL Acquires Time Warner in Largest Ever Expenditure of Pretend Internet Money [theonion.com]
they paid with AOL disks?
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In the case of a Microsoft/GM merger, I'd say pretty much everyone having to share the road with them. Symantec Automotive might be *very* happy, though...
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All this talk about losers, lets no forget the winners and I mean really big winners. The brokerage companies involved, the lawyers and of course those corporate executives who got massive bonuses as a result. The reality is the Time Warner AOL merger was one hundreds percent successful for those people who initiated it just as of course splitting off AOL from Time Warner will again be one hundreds percent successful for the same group. When it comes to the shareholders, expect to lose money if you buy int
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"Dot com" just did not compute for them. (Score:3, Informative)
You are completely right, but they never would have changed their name to "Time Warner.com or something idiotic like that". I don't think that "dot com" really meant anything to them; they really didn't understand how the world was changing. They were stuck on the AOL way of doing things, which was most definitely NOT "dot com".
Part of that whole mess was just raw psychology: hubris, blindness, old fogeyism, and getting run over by the bullet train of market reality. In the period circa 1998 - 2001, Win
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Old fogeyism is a kind of Hubris ("I know better than all those who came after me even though they have access to more information") and getting run over by your metaphorical bullet train is just more of the same ("You say I'm standing on the tracks? This is where I'm building my house!") Point is, I would argue that every dot-bomb casualty fell after pride. These can be difficult to tell apart from those companies never intended to do anything other than make a nice IPO but there are real differences.
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Yup. Everyone had their well-worn copies of Crossing the Chasm, and once we hit the mainstream, we never wanted to go back to early adopters again. In fact, the quickest way to kill any project at AOL was to say "That's really a power-user feature". It never seemed to occur to those folks that at so
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I define AOL as losers, irrespective of who lost or gained money.
New Slashdot Unit (Score:5, Funny)
1 Time Warner AOL merger of negative shareholder value is worth 14.3 Carly Fiorinas.
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What was AOL for, again? (Score:5, Interesting)
I mean, like you couldn't see that coming. AOL only had relevance when there was still a big dial-up business. They were a media company only in the sense that they were adept at scraping an eclectic batch of content from other sources and surrounding them with blocky, juvenile graphics.
Broadband to the home made AOL redundant. Without Time Warner to prop it up, AOL would have ceased to exist years ago.
Or, maybe not... I am continually astonished at the number of people with cable or DSL to their home who think they need a third-party ISP on top of the ISP they already have, by definition, with their broadband service. In that respect, AOL has been a marketing phenomenon, continuing to sell services long after those services became largely unnecessary. But that's not a sustainable business model. (Nor is making it as difficult as possible to quit.)
Comment removed (Score:5, Interesting)
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AOL had things like online encyclopedias and other "premium" content.
They had some nice repositories of code samples and game add-ons and stuff like that. I remember downloading a bunch of addon planes and scenery and stuff like that for the MS Flight Sim back in the mid-90s.
There was just far less on the web itself at that point, and finding the stuff that was there was harder as it was before the days of Google and pretty good search results.
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Back when the web was in its early infancy there was not a lot of descent content on it. AOL had things like online encyclopedias and other "premium" content. Also, in the early years AOL allowed you to chat with other users. A web user only had relatively unreliable IRC servers.
You're forgetting the most important point: the relaxation.
"You've got mail!" That friendly voice started the whole experience right, after the sound of my modem dialing up. Then you had a leisurely bathroom break while you waited for anything to load. Then you could read your first e-mail, then go and get a snack while you waited for the second e-mail to load.
AOL on dialup was like a wonderful vacation.
Re:What was AOL for, again? (Score:5, Interesting)
A friend of mine still uses AOL dial-up at I think $24.99 a month, when he can use his phone company for broadband for less then $20, because he's used AOL for the last 10 years and that's all he knows. I downloaded firefox last time I was over there and blew his mind by minimizing his AOL window crap and pulling that up. He thought that was neat, but it didn't look like AOL so he had no idea how to navigate to a different web site, using a real web browser.
AOL, your 15 minutes are over, please turn the lights out when you leave, maybe Time Warner will wither away in the darkness of an antiquated media format.
AOL was an attempt to avoid another dotcom bust (Score:5, Funny)
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A number of people have their old @aol.com email addresses that they are loath to let go of, and they're scared to cancel their AOL accounts because of the horror stories you may have heard about trying to cancel.
What most of them don't realize that they could easily cancel (AOL KW:cancel) their AOL subscription down to the Free level, keep their old email address, lose the ability to call Indi^H^H^H^Htech support when they need help, and drop the dialup service since a number of them are at least on reside
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> A number of people have their old @aol.com email addresses that they are loath to let go of, and they're scared to cancel their AOL accounts because of the horror stories you may have heard about trying to cancel.
Heard? I've lived it. I tried for 11 days, hours and hours on the phone to quit AOL. I finally canceled the Visa that they insisted on dinging even after they said I had quit. I half expected them to take me to small claims court because they couldn't continue to charge the canceled car
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I am continually astonished at the number of people with cable or DSL to their home who think they need a third-party ISP on top of the ISP they already have, by definition, with their broadband service.
I see it in mostly older people who don't fully understand 'teh internet' and think that somehow that without AOL that they won't be able to do...something.
I've noticed that if I end up in a house that has plastic covers on it's furniture the likelihood of them having AOL just went up.
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Why, swapping 15k pr0n pics and meeting fat chicks in chat rooms, of course.
That's what AOL was for.
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Or sending unsolicited pr0n, apparently. Massive pr0n in our mailbox from people we didn't know was the final straw that gave me the energy to brave their intentionally horrid disconnect process.
...yay? (Score:2)
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I do in the sense that people will eventually lose their jobs with this is settled. I never thought the AOL purchase was wise, but I still feel for the people working at TW and AOL. I'd be willing to bet though the executives are going to blame everyone but themselves (see Ford, GM, and co) for the same reason. The recession did a good number on these companies too, but the writing was on the wall a long time ago, and they ignored the problems with their companies.
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There Must be a Pony in Here Somewhere (Score:5, Interesting)
The book 'There Must be a Pony in Here Somewhere' is a great read about this whole debacle.
To spoil the title, it's about how a small pile of steaming horsecrap is just a pile of steaming horsecrap, but if you get a HUGE pile of it, then start digging, because there must be a pony in here somewhere. At least that was Time Warner's theory.
http://www.amazon.com/There-Must-Pony-Here-Somewhere/dp/1400049644/
Question is who wants to buy AOL? (Score:5, Interesting)
Microsoft could buy AOL and merge it with MSN.
AT&T could buy out AOL and merge it with their ISPS and Yahoo.
Oracle could buy out AOL and merge it with Sun, and port the AOL software to Solaris and SunOS.
Google could buy out AOL and turn it into GOL or Google Online.
Nobody can buy out AOL and let them go into bankruptcy with all of their debt.
AOL was a crappy ISP with bloatware for their connection software. Almost every service that AOL provides one can get for free or almost free on the Internet. Before the Internet explosion, AOL was something like Prodigy, CompuServe, et al because there was no world wide web. I can remember when AOL was Commodore 64 GEOS based, before it was ported to Windows and the Mac.
The best part of AOL was Netscape, but they even got rid of that.
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AOL was a crappy ISP with bloatware for their connection software.
I remember the days when AOL used to fit onto a single floppy disk. It might have been bloat relative to the computing power at the time, but there still had to be tight coding to get it to fit the installer into 1.38MBytes.
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AOL was awesome for picking up girls. I probably had more hook ups through AOL than everything else I've tried combined. I haven't used it in probably a decade (I got married), but nearly everyone had a public profile. Search for certain key words within your location, see which were online, and as long as you weren't a douchebag it was relatively easy to get something out of it.
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I don't think it was Commodore 64, though they share the same legacy. It came from Quantum computer services which had the C64 QuantumLink, but there is also lineage to AppleLink on the Apple II and Mac platform. In fact, I was a beta tester for AppleLink back in the late 80's and still have the original mailer, cover sheet, and 5.25" diskette for the Apple II (not GS, we're talking //e) that says America Onl
Ted Turner will fix it (Score:2, Funny)
Hindsight is 20/20 -now look at facebook & twi (Score:5, Interesting)
Where do we see the same thing today? How about Twitter and Facebook? We've detected some outrageous valuations but there is no plan for either to move to becoming a self sustaining business.
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Same can't be said for Twitter, which at the moment has exactly $0 revenue, and is proud of it. Idiots.
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AOL based their entire business on local dial up and they had no plan for transitioning to broadband. Any fool can see that in 2009 and their valuation at the time of the merger looks silly in hindsight.
Dude, I know hindsight is 20/20, but everyone except Time Warner executives knew the merger was a bad idea back in 2000. Another person above posted this article from The Onion [theonion.com] from back then.
I remember every single person I knew going, "what the fuck?" when we heard of the merger. It was 2000! I was wasn't exactly living in an urban metropolis, but I already had had access to broadband for over a year. Everyone knew AOL was going to crumble and quick.
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Big damn deal (Score:1)
But neither side ever took advantage... (Score:5, Insightful)
Thing is, I remember when it was first announced thinking that if it gave AOL access to Time Warner's content it was a great idea. But the thing is, it never really did. In the end none of Time Warner's companies ever really put their content out there (Standard MPAA/RIAA fears) and so AOL never got any content out of it. So while the merger had potential, neither side took any advantage of it at all. Now AOL is just a ISP basically, and Time Warner is still just another content provider trying to cling to the old ways while they figure out what this Internet thing is.
AOL == AIM. Ballmer is opening his checkbook. (Score:5, Interesting)
For a monopolist with a war-chest full of cash like Microsoft, it's worth buying AOL and throwing the rest of the company away just to get AIM users.
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I don't know about everyone else, but there's a decent chance I'd stop using AIM if the two merged. I can't stand MSN/Windows Messenger. I use Pidgin anyway, but if I had to jump through any hoops at all during the transition, I'd just give up altogether.
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The man makes a good point. I almost forgot that every time I open Adium, I'm really using an AOL service. Almost.
When I did freelance tech support, I had a couple of elderly clients who used AOL for email. I don't know what they'll do if the service simply disappears.
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Perhaps everyone is missing the important asset here: AOL Instant Messenger.
I was just thinking, if AOL went out of business, what would happen to my AIM account? I decided I would just use the Facebook messenger. All of my friends are on it, and I already have an account. Why use anything else?
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[cnet.com] http://news.cnet.com/Commentary-Taking-AIM-at-AOL/2009-1023_3-268050.html [cnet.com]
[articlearchives.com] http://www.articlearchives.com/law-legal-system/antitrust-trade-law/555912-1.html [articlearchives.com]
[windowsitpro.com] http://windowsitpro.com/article/articleid/26010/aol-reneges-on-aim-interoperability-promise.html [windowsitpro.com]
Glossing Over..... (Score:2)
"Time Warner To Spin Off AOL" is a nice way to put it.
A more descriptive, and accurate, title would be:
"Time Warner Shits Out AOL Tapeworm".
Don't you see the plus side? (Score:2)
Mud (Score:3, Insightful)
What I don't get is that in every circle I knew the AOL had been mud for a long, long long time. How disconnected from the real world do you have to be to merge with this turd of a company that everyone was cheering all the way to the bankruptcy courts? AOL was akin to some sort of naive ponzi scheme, its viability so dependent on easy-new subscribers that they probably have printed more CDs than Sony Music by now. It's just ridiculous. Back then AOL subscribers were like people still watching black & white movies without words in the year 2000 because they didn't know color 'talkies' existed.
Now, let's talk about the next big companies I want to fail, here's the top of my list:
- Sony (largely a has-been)
- Microsoft (could take awhile)
- GM (let it die, for god's sake)
- Citigroup ($1 per share = lols)
- Al Gore's media channel (he invented the internet)
- T-Mobile (horrible coverage)
- I would put Apple on here, but the iPod redeemed them in my eyes \ I broke down and bought one, and it works fairly well.
Anyone got any I missed that need to be aded to the list?
They never 'got it' (Score:2)
Neither company really knew what to do with the other. It was a bad merger but could have been great if only they'd had less clueless management. The only thing they looked at was subscriber base and thought that somehow that would be all they needed.
AOL could have evolved into Facebook or MySpace with a re-branding effort and a move to less proprietary hardware/software. They were stuck with their own homegrown stuff... look at Facebook which started as a ColdFusion application and has since moved on (or w
Holy sentence structure, Batman! (Score:2, Funny)
"Time Warner is inching closer to untangling one of the worst mergers in American corporate history that began with the merger of Time Warner with America Online, a deal that has resulted in the evaporation of more than $100 billion of shareholder value."
This sentence deserves some untangling of its own...
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I wasn't as read up on the "business world" when this happened, but why did a company like Time Warner merge AOL into it?
The same thing Microsoft and GE were aiming at with MSN BC: "convergence." Yes, I think that was the correct buzzword at the time.
Is MSN even still around as a dialup service? AFAIK, MS has no ownership of MSNBC anymore.
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There were several online services in dial up days. Originally, none of them were connected to the Internet. People who had different online services couldn't exchange email. There was Compuserve (the uber-Geek network), there was Prodigy (for not completely geek early adopters), and AOL (for everybody else). OK there were a couple of others, but you get the idea. You could only access
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