was there any synergy and follow up implementation to the AOL - TIME WARNER MERGER?

was there any synergy and follow up implementation to the AOL - TIME WARNER MERGER?

Expert Solution

In the context of mergers and acquisitions (M&A), Synergy means the combined value and performance of two companies will be greater than the sum of the separate individual parts. Here in case of AOL and TIME WARNER, The latter, via AOL, thought it would now have a footprint of tens of millions of new subscribers. On the other hand, AOL thought it would benefit from access to Time Warner’s cable network as well as to the content, adding its layer of so-called ‘user friendly’ interfaces on top of the pipes. Basically the idea was to combine Internet technology with entertainment content, sell it online and create a blockbuster new industry for the 21st century. But to their surprise, the synergy and cooperation failed miserably because-

1) The jefes who run the big operating units preferred the safety and comfort of a large corporation to the risk of running one's own business. And that created powerful fiefdoms where divisions didn't cooperate with each other resulting in failure of synegy.

1) Lack of Mutual respect

2) They lost the sight of what customers really wanted.

3) Time Warner turned out to be the worst kind of conglomerate.

jeff jeffy answered 4 months ago

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