I guess the lack of discussion on the blockbuster AOL/TWX deal means that either GG's don't play Godzillas, or everyone is still trying to figure this one out, or everyone has figured it out and doesn't like it. Whatever the case, here is my take on it:
AOL's godzilla status is well accepted, 19M paying subs plus maybe 3-4 times that many with their other properties, well ahead of any other ISP or internet content provider. This deal will solidify their lead and increase it by tapping into TWX cable, TV, and print subscribers.
AOL's perceived weakness had been their lack of broadband, although they were making inroads to DSL service. The TWX merger gives them not only access, but they own their own cable business, with 1.3B in revs last year.
AOL TV will roll out shortly, meaning interactive TV with set top boxes.
AOL Anywhere will give them a mobile wireless entry.
AOL and TWX's deals with other companies is voluminous, they are the ultimate aggregator. Content is what will keep AOL in the lead, and with TWX they merge their own content with TWX's content to form a behemoth new media company: Time, People, In Style, Sports Illustrated, Entertainment Weekly, Turner Broadcasting and on and on. From TWXs SEC filing: "Time Warner, Inc. owns 100% of Turner Broadcasting System, Inc. and Time Warner Companies, Inc. Turner Broadcasting System, Inc. owns 100% of Cable Networks-TBS and Filmed Entertainment-TBS. Time Warner Companies, Inc. owns 100% of the Publishing division, TWI Cable and the Time Warner General and Limited Partners."
Oh, and don't think of these as click and mortar operations, these will all transition -- they are already transitioning -- to interactive TV. They do have B&M for their book publishing business, but who knows if these are not profitable they can easily be spun off.
I would say AOL/TWX might become not only the ultimate godzilla, but a pretty good gorilla as well... |
