AOL Day?
You thought Christmas was going to be big this December? Hannakuh? No, the press is hyping "AOL Day," when the company is supposed to reveal its ability to survive and thrive in a post-bubble world. I've said it before and I'll say it again: AOL's acquisition of Time Warner was the right move for AOL shareholders and, over time, will present ample returns to Time Warner shareholders who are feeling, well, a little burned. A little burned is not so bad in this day and age. Ultimately, AOL shareholders are preserving the value of the shares they took into the deal and Time Warner shareholders are gaining significant upside when the media market turns around.
Some of the coverage is reasonable, like this SmartMoney piece. For a completely fact filled but meaningless analysis of the situation at AOL Time Warner, click here. You'll be treated to Kaufman Brothers analyst Paul Kim's comments, which include the idiotic statement that "If you are AOL you have very few venues to differentiate" and the deep musing that "AOL's incredible advantage is that it has a significant portion of the market and people are habitual." So, bascially he's saying that if you are AOL, you get to see the audience every day, but you can't change anything?
The press is going to treat a company with revenues that are higher than at the time of the merger, which has not seen a decrease in online membership, just a slowing in new members, and that has huge media assets to experiment with as rich media evolves as LIVING OR DYING on the announcements made Dec. 3rd. We're building to an incredible anti-climax that the press will call a "failure." And, yet, nothing much will have changed. The overall economy will still be bad and the merged company will still be struggling, as all merged companies do, to understand its new portfolio of assets and the opportunities they represent. Dec. 3 will not be a day of epiphany, so anyone going in expecting that is a fool.
Posted by Mitch Ratcliffe at November 25, 2002 05:02 PM | TrackBack