Aol Case Study
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Case:
Mission
Then: “to build a global medium as central to peoples lives as the telephone or televisionÐand even more valuable”
To serve the worldss largest and most engaged community
Products that are demonstrably superior and pleasantly different from products offered by industry rivals
Introduction
The merger of AOL and Time Warner would combine old and new economies to capitalize on convergence of entertainment, information, communication and online services
It involved a verticalcombination of the largest Internet content provider and aggregator with one of the largest cable system operators
AOL offered Time Warner specialized skills in readying content for the Internet:
That Time Warner, with its brands, content and distribution
channels, has embraced this deal so enthusiastically is an extraordinary admission of the difficulty that many traditional
companies face when trying to adapt their businesses to the
Internet. Its own in-house efforts to move the company in that direction have pretty much failed.
AOLs input was not solely its proprietary content. Rather, AOLs contribution was its unique aggregation and presentation of content that allowed for easy consumption by end users.
For example, a Time Warner video placed on the Internet might never be noticed if not for AOLs packaging and distribution.
To complement AOLs upstream input, Time Warner offered the conduit over which such content would reach residential broadband customers at high speeds.
Prior to its proposed merger with Time Warner, AOLs objective was the maximizing the profits
of its Internet service and content businesses.
The acquisition of Time Warner presents AOL with a second,
complementary profit stream to its existing portal businessЖthrough for example the sale of broadband transport
Industry