STRATEGIC MANAGEMENT

Strategic Management



Abstract

On February 11, 2000, America Online, Inc. (AOL) and Time Warner Inc. (Time Warner) filed joint applications under Sections 214 and 310(d) of the Communications Act, 47 U.S.C. §§ 214, 310(d), requesting Commission approval of the transfer of control to AOL Time Warner of licenses and authorizations controlled by AOL and by Time Warner or its affiliates or subsidiaries. On March 21, 2000, the parties supplied the Commission with a supplemental public interest statement. This transfer of control took place, as the result of the proposed mergers of AOL and Time Warner, following which both AOL and Time Warner became wholly owned subsidiaries of a newly formed holding company, AOL Time Warner. The ultimate ownership and control of those entities holding licenses and authorizations were transferred from AOL and Time Warner to AOL Time Warner. On January 11, 2001, the Commission gave to transfer control of certain licenses and authorizations to AOL Time Warner, Inc., a newly created company.(Strategic Management AOL Time Warner)

Strategic Management: Compare and evaluate the three methods or types of strategic development

Introduction

AOL, or America Online, based in Virginia, was largest online company in America providing more than 20 million subscribers the access to the Internet. And before the announcement of merger, it had a capital value of $163 billion. America Online had also previously merged with other companies, i.e. [AOL-Time Warner Merger] Netscape and CompuServe. On January 11, 2001, AOL (AOL) and Time Warner (TW) undergone the strategic change and merged together to form AOL Time Warner (AOLTW) a media and communication source of power.

Its aim was "to become the world's most respected and valued company by connecting, informing and entertaining people everywhere in innovative ways that will enrich their lives" [AOL Fact book 2001]. In this way the skill to provide Internet access to households would play a major role in attaining its determined grand goal. The merger between AOL and Time Warner was made to have horizontal and vertical boost in the power of AOL in the market for Internet online services. The anti-competitive effects of this merger were expected to cause damage to the consumers. Time Warner on the other hand claimed itself as one of the world's largest media companies. It owned the cable television channels CNN. TNT, Cartoon Network and Home Box Office and is a publisher of magazines, books and web sites. [AOL, Time Warner confirm merger] Time-Warner including its Road Runner auxiliary is one of the most significant present and future competitors in this business because it is amongst the leading distributors via high-speed broadband Internet connections, the next generation of Internet access. This merger thus unites AOL and one of its most significant competitors in online services, generating noteworthy horizontal anti-competitive effects.

Time Warner is also the largest provider of content in the world, and for households in many major U.S. markets is the dominant provider of high-speed Internet conduit infrastructure and access service. The leading conduit for high-speed Internet access was cable modem service provided ...