Time Warner is the result of the merger in the year 1989, of worth 14$ billion between the two big players: 1. Time was established in the year 1922 and was in magazine publishing business. It was followed by Television Company and acquired American television and Communication Company. 2. Warner Brothers established in the year 1923, was into the film production.
In the year 2001, the merger between these two giants was held with the aim “to create the world’s fully integrated media and communication company for the internet century in an all stock combination valued at $350 billion.” This is the largest merger in the history of America (Theierer Adam, January 11, 2010).
The merger was carried so as to create the global media powerhouse. Then industry in which they were operating was expanding very fast. The merger was structured as a stock swap. The merger was correct as both the companies lacked the assets crucial for competing and both of them felt that they cannot alone develop the resources quickly so as to compete effectively. Both the companies perceived each other as the complementary strength which resulted in the merger. The companies were correct in their act so as to answer their major competitors such as MSN and Yahoo.
AOL entered in the merger so as to sustain its position in the competitive environment. The decision to merge with the durable and profitable company with tangible assets, at the peak of capital value of AOL, was the perfect strategic decision. Time Warner wanted to access digital era by integrating with Amercia’s largest ISP.
But, this merger does not change the behavior of the leaders of these companies, and resulted in the conflict of personality, which made the merger a great failure. As a result of which overly politicized positioning of executives of AOL took place. Time Warner failed to monetize the distribution of