And good riddance
: There have been reports today that Steve Case wants to buy AOL back for $10 billion. The stories, incredibly don’t report the value of AOL at the time of the world’s biggest merger mistake, but from what I find about the value put on Time Warner and the value of the combined entity at its foolish height, it seems that AOL was then supposedly “worth” about 10 times what it’s “worth” now. I say, sell the turkey to the turkey.
5 responses to “And good riddance”
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It’s worth noting that when the Kerry campaign talks about the current administration having “the worst economy since Hoover” and returning to the economic days of the late Clinton administration, they’re talking about the days when companies like AOL were valued at 10 times or more what they were actually worth, and much of the tech sector hiring was based on corporate vauluations equally as far off into Alan Greenspan’s land of “irrational exhuberence.”
If you’re willing to suspect all logic in valuing companies’ worths or the future demand for their products (something that also took place under Coolidge and Hoover in the late 1920s), you can run any economy at high speed for a while, until reality sets in. Case and AOL took advantage of that to scam the stockholders of Time Warner into believing they were the wave of the future, and they “old” media had to jump on the bandwagon in order to survive. Now, the biggest effect of a sell off would have on the company is all those extended commercial holes Time-Warner’s cable channels will have to fill in the future in place of the AOL 9.0 optimized ads that are running today. -
Tow it out to sea and sink it, why not?
AOL/TW merger was a result of that hated thing, “synergy”. A big company owning all these different forms of content and content delivery. Vertical and Horizontal integration etc.
It happened in the 70’s and it didn’t work i.e. the disco craze. Media execs convinced themselves that disco was this synergy-friendly, cross-platform musical genre that could be leveraged across all forms of media- good for movies, good for radio, good for TV, good for licensing out to advertisers…
All they saw were brand extensions. It had nothing to do with music. It was all top-down.
AOL was similar: built to fit some corporate patronizing view of “Mr Average”. When they designed their blogs, all they could see were their customers doing “kitty blogs”. They didn’t see people like you (Jeff) or Doc Searls. They just assumed we’d all want to be very, very average.
Nobody wants to be average. -
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aol’s stock rose because people were just as interested in buying that stock at $80, $90, $120 as TW was in buying the company for far too much too.
hell, people are still paying $21 a month for aol.
difference is, you dont see greenspan running around trying to convince them to stop doing that. -
At the time I thought it not worth investing in because both companies were losing money but it wasn’t necessarily a bad deal for either side. Purchasing Time Warner gave AOL some real world assets that it could fall back on should there ever be a day when things went sour. The mountain of cash that AOL had at the time in spite of losing money gave Time Warner a useful temporary buffer against bankruptcy and thus an extended time period in which to get its act together. And should it turn out that blogs and internet news services are indeed the wave of the future it’s not clear to me that Time Warner will gain anything by throwing away AOL unless they at least keep one of its subsidiary corporations such as Compuserve or Netscape.
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The best will be when they sell it and TWX goes up.
