How Does the Merger of AOL & Time Warner Cable Help the Consumer?

When AOL bought out media giant Time Warner, analysts like then Federal Communications Commission chairman William Kennard believed that the merger would ultimately benefit consumers by providing new media options and spur technological development.

History

AOL and Time Warner officially merged in January 2001, according to Wired Magazine. When the companies consolidated, AOL was the No. 1 Internet service provider and Time Warner the No. 2 cable provider. The two firms believed that a merger would accelerate the growth of the distribution of online media.

Results

The merger between AOL and Time Warner did not have any of the intended effects, according to former Time Warner CEO George Levin. TIME asserts that AOL and Time Warner did not mesh. Time Warner, for example, could have used AOL branding one its cable Internet service. Many business textbooks write of the merger as the biggest failure in business history.

Considerations

In 2010, after nine years of partnership, Time Warner and AOL agreed to split and have AOL operate as an independent company, according to CNN.

References

• CNN: AOL Looks Ahead, But Stock Drops
• Wired Magazine: AOL, Time Warner to Merge
• "New York Times"; How the AOL-Time Warner Merger Went So Wrong; Time Arango; 2010
• TIME: Why AOL--Time Warner Wasn't Doomed to Failure
• CNN Money: Time Warner to Split Off AOL