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Technology Stocks : Frank Coluccio Technology Forum - ASAP -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (945)	1/12/2000 11:44:00 PM
From: ftth	Read Replies (1) \| Respond to of 1782

re: AOL-TWX deal.... Y A W N Same old hand-wavy arguments about how the deal validates this or that. Only the creduloids believe it--the army of contra-Luddites that thrive on techno-hype-paradigms of any flavor. It doesn't validate squat! People seem to confuse "activity" for "achievement" all too often. Activity doesn't validate. Achievement validates. Nothing has been achieved yet, and there's a minefield ahead in the attempts to integrate what will be one of the largest corporations in the world. No value is CREATED by the deal, and I'm sure AOL initiated it as their way out of the corner they backed themselves into years ago whe they backed out of cable modem trials because cable modems will never go anywhere. Lots of heads will roll and lots of key people will leave between now and a couple years from now, which is about the soonest they could JUST BEGIN to produce tangible results. There's just no need to jump on the rah-rah wagon with this--it will only prove (or disprove) itself over an extended period of time after numerous successful joint deployments. Graduated momentum is the only way to morph into a 300 billion dollar market cap corporation. The initial hype will melt away fast. Only after we've seen Time Warner spin or sell off pieces will it even give the impression that they're starting to get their ducks in a row. There's just no way that the sum of the two parts of 2 hundred-plus billion market cap companies that have been in existence for years can possibly equal more than 2. Pieces of "synergy" surely exist, but there are also pieces with a negative contribution going forward--jagged edges that just can't be forced to fit the mold. Those have to be tagged and bagged. Just because the CONCEPT of the combination creates some exciting images doesn't mean the execution to achieve that will follow. Look at @Home as a perfect example of HUGE potential squandered through lame execution. Mind-numbingly lame. But hey, it's only half-time. Maybe this is the cold slap in the face @home needs to flush Excrete@Home and reload. I'm not holding my breath though. Back to "the deal:" It's a good high-level strategic move for AOL, given the remaining unmarried landscape of companies and that ticking clock, but it won't likely give them exclusivity rights on the content they acquired since that would be a foolish move for the combined company going forward. You don't force your current customers to detour through AOL. In another sense, AOL's past preaching of "non-exclusivity" (even though that was with respect to ACCESS) would likely bite them in the butt if they tried to pull an exclusivity of content arrangement anyway. How tough a job will this combination be? Look at Pathfinder. Dismal Failure. If the owner of the content--who you'd think understood the demographics of each content piece's intended audience better than anyone--can't make it work to the GENERAL PUBLIC, it sure as heck isn't a given that shifting the oness to AOL will change anything (especially given the profiles, likes, and dislikes of AOL users versus the rest of the internet users in the world). And oh, what of the trouble brewing for AOL-Europe with this deal? I think the best immediate thing that comes out of this deal is indirect effects: lighting a fire under the butts of certain companies that need some pyrotechnics. dh