AOL Splits From Time Warner
AOL is now an independent company again, after it finally parted ways with Time Warner.
What began as an industry changing company, AOL quickly found that just because you have a few billion in inflated stock laying around doesn’t mean you are invincible.
Back in the 1990′s AOL got its huge start by providing unlimited dial up internet access for $19.95 / month. It was this service offer that propelled AOL (America Online) to the top, After all compared to a $29.95 metered dial up account it was an amazing deal.
Then AOL (America Online) got a little sloppy and used $147 billion of its stock to leverage the acquisition of Time Warner. The move was made with the logic that the TV and printed media arms of Time Warner would complement the base services of AOL. That was in 2001.
Opps! Broadband Comes Online . . .
This would have been great, but what the big wigs at AOL didn’t realize was that internet speeds were ramping up in a way that made AOL core business model obsolete. Also the Dot Com bubble burst and now AOL stock was not so over-inflated.
As AOL stock fell, so did their revenues due to dial going the way of the dinosaurs.
AOL knew that Time Warner had to go . . .
In 2003, AOL Time Warner because just plain old AOL and industry analysis knew that the investable had come.
6 years later the pair finally made a clean break from each other, signifying an end to one of the great dynasty’s that was born from the Dot Com bubble.
As Jeffrey Logsdon, an BMO Capital Markets analyst, said that the AOL and Time Warner marriage was “a nine-year adventure akin to a marathon through the mud.”
In the past year, Tim Armstrong (a formal Google Exec) has cut 2,500 jobs and plans to make the core focus the monetization of AOL’s many first class internet properties such as AOL.com, MapQuest.com, Engadget.com, etc.
Media Contact:
Time Warner Inc.
Corporate Communications
Edward Adler, 212-484-6630
Keith Cocozza, 212-484-7482
or
Investor Relations
Doug Shapiro, 212-484-8926
Michael Kopelman, 212-484-8920
