Science Fair Project Encyclopedia
Time Warner Inc. (AOL Time Warner Inc. between 2001 and 2003) is the world's largest media company with major Internet, publishing, film, telecommunications and television divisions. The company is officially headquartered in New York, New York, United States.
The company now known as TimeWarner was created in 2002 for the merger of the companies AOL, and Time Warner. In an unusual structure, both companies merged into the newly created company. AOL was an internet service provider with many proprietary features. With its large stock market value, AOL was the purchaser in this case. Time Warner was a diversified media company which was the result of the merger of Time Inc with Warner Brothers Inc. In 1996, the group merged with Ted Turner's Turner Broadcasting System, making Mr. Turner the largest individual shareholder of the group, though not the single largest shareholder.
There has been some debate as to what led to the merger. On the side of Time Warner, the CEO was very concerned (like many CEOs of the time) of the possibly radical change to business that the internet would enable. He sought to interanlly develop Time Warner internet initiatives but was frustrated at the lack of progress. He saw a merger with AOL as acellerating this process. Many business journalists have reported that internally at AOL, the main reason for the merger was that AOL executives felt that its stock price was severly overvalued (and implied a growth in profits that was impossible) and that the stock price would collapse without a big merger.
The merger faced immediate opposition by consumer groups and other media companies in part due to fears over monopoly issues especially due to vertical integration. Media companies felt that the new AOL Time Warner would only feature Warner Brothers movies on its AOL service, and in its magazines for example. In other words, that it would censor competitors advertising and cut off a huge area of media from them. This had always been a more limited possibility all along with Time Warner, but Time Warner was notorious as that all of its divisions were run essentially seperate with almost total independance. Media companies feared though that this would change when AOL executives were brought aboard.
Consumer advocates were primarily concerned with the impact of the possible product tying between Time Warner's cable TV systems and AOL's internet service. At the time it was thought by many that interactive or internet enabled TV was going to become very popular. Consumer groups saw that this as a possible attmept to corner the market by AOL, which could force all of the Time Warner cable subscribers to use AOL branded Internet-TV. The initial impetus for most of this opposition however came from small Internet Service Providers, who felt that AOL would essentially tie its Internet Service with Time Warner's cable modem customers. These ISP's wanted to be able to be a service provider option for Time Warner's cable internet customers. AOL and Time Warner pledged not to do this at the time of the merger.
Many analysts and reporters were also concerned that a smaller (but more highly valued) company less then 15 years old was aquiring a large media corporation with a long history. This was possible because mergers are often performed by companies exchanging stock shares with one another (in a process called pooling of interests. Since AOL's stock price (and thus its market capitalization) was so high, it was able to aquire Time Warner while paying a small premium.
Post merger history After the merger was announced, AOL executives immediately began trying to change the direction of the combined company. Although AOL's CEO Steve Case was made executive chairman, while the Time Warner CEO remained CEO of the combined company, most of the changes were pushed by AOL's powerful advertising sales deparment. This department had been a large factor in the business sucsess of AOL (through both agressive sales tactics and frauduland financial accounting). It attempted to achieve some sort of synergy, or partnering, between the various areas of the new AOL Time Warner (such as the magazines, the television stations, and the ISP). It began selling advertising deals as a package, where a company could pay for ads appearing on television stations, magazines, and America Online, all at once. The America Online ISP division however, continued to decrease in profits every quarter. Because of this poor performance, and because of the collapse of the stock valuation of similar internet companies, accounting rules required that the internal value of the business on the balance sheet (known as goodwill), be subtracted from the balance sheet. This subtraction (or "right down") caused AOL to report a loss of 99 billion dollars in 2002, the largest loss ever reported by a company. This led to the company changing its name back to Time Warner, and removing Steve Case as an executive chairman. The CEO was replaced by a Time Warner executive named Richard Parsons . A number of assets were sold. The professional wrestling federation WCW was sold to competitor WWE. The Atlanta Hawks, Atlanta Thrashers, and operating rights to Philips Arena were sold in mid-2003. The fifty percent share in the cable channel Comedy Central was sold to Viacom and AOL/Netscape's longrunning litigation against Microsoft was settled out of court.Warner Music Group, a music company, was sold to a group of investors led by Edgar Bronfman, Jr. in late 2003. In 2004 Time Warner announced that it was shutting down its CNNfn financial information channel and disposing of its share in Google.
The following enterprises are part of Time Warner:
- CNN, a world wide news company as well as a cable news channel
- HBO, Cinemax, Turner Classic Movies, cable movie channels
- TBS Superstation, TNT, Cartoon Network, cable channels
- The WB television network (co-owned with Tribune Company)
- America Online and via its Web Properties Group:
- CompuServe (Classic, 2000 and Basic), an Internet service provider
- Mirabilis, makers of the ICQ instant messaging program
- Mapquest, a WWW map and direction site
- Netscape, a web portal and browser vendor, formerly leader of the Mozilla project
- Nullsoft, a software development group best known for Winamp.
- Time Warner Cable, a cable television company
- TIME, a weekly news magazine
- People, a weekly celebrity magazine
- Sports Illustrated, a sports magazine
- MAD magazine, a humor magazine
- Fortune, Money Magazine , business and investing magazines
- Warner Bros., a movie studio
- New Line Cinema, a movie studio
- Atlanta Braves, a Major League Baseball team
- DC Comics, a comic book company
- Rhino Entertainment, a specialty recording, home video, and production company
- Turner Entertainment, production company largely responsible for the distribution of the classic MGM, RKO, and Warner Bros. film libraries
Time Warner also owns several other television channels and magazines, including CNN Headline News and Entertainment Weekly, as well as Time Life books and music. See external links below for a complete list.
Time Warner's market capitalization is US$84 billion (2004). When the AOL-Time Warner merger was announced in January 2000, the combined market capitalization was $280 billion.
Time Warner Inc. owns several large properties in New York City; certain buildings in the Rockefeller Center complex and adjacent office towers house its main offices; one of which houses a CNN news studio. In late 2003, Time Warner finished construction of a new twin-tower complex, designed to serve as additional office space, facing Columbus Circle on the southwestern edge of Central Park. Originally called the AOL Time Warner Center, the 755-foot, 55-floor mixed-use property was renamed Time Warner Center when the company itself was renamed.
Board of Directors
As of March 2004.
- James L. Barksdale (age 61) - Barksdale Management
- Stephen F. Bollenbach (61) - Hilton Hotels
- Stephen M. Case (45) - AOL co-founder
- Frank J. Caufield (64) - Kleiner Perkins Caufield & Byers
- Robert C. Clark (60) - Harvard University
- Miles R. Gilburne (52) - ZG Ventures
- Carla A. Hills (70) - Hills & Company
- Reuben Mark (65) - Colgate-Palmolive Company
- Michael A. Miles (64) - Philip Morris Companies (now Altria Group)
- Franklin D. Raines (55) - Fannie Mae
- R.E. Turner (65) - Turner Broadcasting System
- Francis T. Vincent, Jr. (65) - Vincent Enterprises
- Kenneth J. Novack (62) - former Time Warner - Affiliate Director
- Richard D. Parsons (55) - Chairman of the Board & Chief Executive Officer
- Time Warner corporate website
- Ketupa - Time Warner profile
- Columbia Journal Review's Who Owns What for Time Warner
- Early analysis of the Time Warner-AOL merger
- Yahoo! - Time Warner Inc. Company Profile
The contents of this article is licensed from www.wikipedia.org under the GNU Free Documentation License. Click here to see the transparent copy and copyright details