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AOL TimeWarner Case Study



             Threats:.
             o Large digital rivals include Microsoft and Yahoo. Both of these large corporations are successfully distributing their digital content across the internet without the help of AOL. .
             o Large media rivals include giants such as Disney and Viacom. These firms have a strangle hold on the print and telecom distribution. However all 4 companies have had to look at adjusting their corporate strategies as a result of the proposed merger of AOL on Time-Warner.
             o Other industry giants, (Microsoft, Yahoo, Disney, and Viacom) could merge and form a conglomerate as easily as AOL & Timer-Warner, this would drive the market into and ologopolistic state and firms would be competing for distribution rights to content. This would be good for consumers and very bad, even detrimental to the welfare of the large corporations. .
             Possible Alternatives.
             1) Continue as planned, merge the two firms and solve each problem as they arise.
             2) AOL could purchase 51% of Time-Warner, use them to their benefit but not need to assume the successes and losses of Time-Warner.
             3) Sign contracts to use Time-Warner's media channels to distribute AOL's content exclusively. .
             4) Sign contracts with all media distributors this would allow AOL to move into a position of market dominance in content distribution areas.
             5) Pass on the merger at this point in time. Wait for a better time economically and financially.
             1) To continue as planned would appear at this point in time to be the best alternative. Although some economists say that the markets and even the world is not ready for a merger of this magnitude, this would give AOL and Time Warner the change to flex their muscle and show that a firm of this size can effectively distribute content on all levels of medium to an audience as large as North America. Although AOL will appear to swallow Time-Warner, this will be necessary as the world is moving from an analog to a digital format.


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