America Online and Time Warner are merging to form a $350 billion
integrated media company.
AOL’s chief executive Steve Case will be chairman of the new company, to
be called AOL Time Warner, which will have combined revenues of over
$30bn. Time Warner chairman and chief executive Gerald Levin will be chief
executive. Case will focus on driving technological developments and
global policy, while Levin will oversee management and company
The new company’s brands will include CompuServe, CNN, TNT, Time and
People, and the merger will open up new distribution channels for both AOL
and Time Warner’s US cable network and AOL’s online channels. AOL Time
Warner also plans to develop specific interactive products.
AOL Time Warner will be 55 per cent owned by AOL and 45 per cent by Time
Warner. The merger is subject to the approval of shareholders, but a
tranche of cross-promotional and content deals are set to break
These include Warner Bros stores distributing AOL disks, AOL carrying Time
Warner’s InStyle magazine and AOL members having access to music clips
from Time Warner artists.
Andreas Schmidt, president and chief executive of AOL Europe, said the
merger was a ”win-win” for the joint venture company. ”The merger is a
natural union between two leading global media companies with strong
brands and joint venture partners. It is truly a win-win for AOL Europe
because it translates into even more significant content and a commitment
to grow our market leadership throughout Europe.”
Meanwhile, General Motors has also signed a deal with AOL to develop
online services enabling customers to interact with dealers at all stages
of car ownership.