Aol Time Warner Inc. – a Bad Idea from the Start? Essay

693 Words Oct 30th, 2006 3 Pages

A. Societal Environment
1. Economic
• Strong competition among internet providers – not able to increase prices(O/T)
• Growing markets, Stage II development for Internet service with Broadband, Cable and DSL(O)
• Business growth, product and service usage (cable, internet, media)(O)
• September 11th disaster(O/T)
• The ‘burst' of the Internet bubble(T)
• Corporations' accounting issues(T)
• Slowdown of the economy(O/T)

2. Technological
• Changes in technology – Implementing change of services provided from dialup to broadband can be expensive and require extensive capital resources.(O/T)

3. Political-Legal
• FCC changes and rulings in broadband regulation(O/T)
• Lobbying against broadband service
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6. Power of other stakeholders: : High
• Negative publicity of merger could hurt in raising capital from future shareholders
• FCC Regulators
• Potential lenders and investors IV. INTERNAL ENVIRONMENT

A. Corporate Structure
• Multiple business segments –
• Cable systems – AOL, Compuserve, Netscape, AOL Instant Messenger
• Media – CNN, HBO, TBS, TNT, Cartoon Network, WB
• Publishing – Time, People, Sports Illustrated, Entertainment Weekly
• Entertainment – Warner music, Warner Bros. Studios
• Decentralized – from top down
• Two business units – Media & Entertainment Group, and Entertainment & Networks Group.
• Business units headed by Don Logan and Jeff Bewkes (from Time Warner)

B. Corporate Culture

• Internal management and cultural turmoil resulted from merger, which had an impact on operating performance.
• Lack of strong upper management presence could hurt cultural implementation of new merged entity
• Differing culture, employee & management personalities and operations
• Boardroom clashes, egos

C. Corporate Resources

1. Marketing
• eCommerce – e-Commerce and online shopping helps stimulate growth(S)
• Copyright – Global copyright advantages allow the company to produce, distribute and sell intellectual property through a variety of outlets such as books, music, movies, and

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