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Bundles of Mergers

January 13, 2000



As corporate marriages go, the AOL-Time Warner deal is a giant one at $350 billion. But let's not be blinded by the big bucks or the big market-share.

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Instead, this megamerger only shows the desperation of big Internet and media companies. They each need to build a Noah's ark against the possibility of being flooded by the next technological wave. And they're chasing after increasingly smart consumers with an expanding wealth of options in very fluid telecommunications markets.

The quickening pace of progress in technology and media should be welcomed. It justifies this set of strange bedfellows: the "old" media of Time Warner and the "new" media like AOL's delivery system on the Internet. But the evolution won't stop there.

No one really needs AOL to use the Web. Yet AOL's marketing persuaded millions of people to pay $21.95 a month for a hook-up. But AOL does need Time Warner's cable system to compete in the big race to provide faster digital services to homes for everything from movies to banking. This "bundling" and the advertising money that comes with it are the current prizes.

So antitrust bureaucrats can rest awhile. And consumers can happily watch the scramble for their dollars.

(c) Copyright 2000. The Christian Science Publishing Society