As times change and large conglomerate corporations do not appear to have the same success as they once did, should AOL and Time Warner continue to focus on a complete merger or could another deal that wouldn't be so volatile be reached.
SWOT analysis.
Strengths: .
o AOL is the leader and largest digital content provider.
o Time-Warner has the largest network of analog content distribution. Magazines subscribers, TV stations, record labels, music distributions, book publishers etc.
o Collectively both organizations would own distribution channels in every possible medium, from the Internet to magazine publications.
o The conglomerate will have the most quality content to distribute to the largest audience.
o Total projected revenues will be measured in hundred of billions of dollars.
o In house content distribution will allow the conglomerate to save big dollars.
Weaknesses:.
o The Time-Warner company stands to loose its identity with this merger. AOL will be the official trading symbol.
o If the deal goes sour both companies will loose large amounts of money. AOL is poised to pay a 71% premium on all Time-Warner stocks, also both firms are highly invested in each other already.
o The public doesn't know how to perceive this deal. Nothing like this has been done before this will be a ground breaking maneuver. If it fails a lot of people will loose a lot of money.
Opportunities:.
o AOL is a content provider, Time-Warner has distribution is all mediums except for west coast broadband internet. Roadrunner is primarily only available in the Eastern United States this make a need for a broadband provider in the west. AT&T is a large national provider, a partnership with AT&T could provide AOL's content to the entire nation.
o The "in house" distribution provides AOL a solid cost cutting measure internally, however use of these channels could be sold or leased to other firms that wish to use Time-Warner's infrastructure to distribute their content.