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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (18524)	4/28/2002 11:26:30 AM
From: MeDroogies	Respond to of 74559

I think we'll remain on different sides of the fence. AOLTW's troubles today are rooted as much in TW's major problems PRIOR to the merger, as they are to AOL's current ad revenue crisis. Remember, TW was losing tremendous sums of money before the merger and had an explosive debt load. AOL had neither. The $54bb they just wrote down was a removal of "goodwill" losses from the books, not real money. The $6bb to Bertelsman may or may not happen. If it does, there is likely to be some accounting involved that goes beyond pure cash, making it less burdensome for AOL. One thing they have done in the past is commoditized their debts. Take a look at their online stuff sometime and see how much BMG advertising is running. When you consider they are fighting an ad rev slowdown, they have lots of unsold inventory to give away in that fashion. Expect it to go a long way in diminishing the $6bb figure.