Aol Case Study

Case: AOL

Mission Then: "to build a global medium as central to people's lives as the telephone or televisionÐ'...and even more valuable"

To serve the worlds's 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.

AOL's input was not solely its proprietary content. Rather, AOL's 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 AOL's packaging and distribution.

To complement AOL's 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, AOL's 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 businessÐ'--through for example the sale of broadband transport

Industry