Time Warner unveiled plans today to complete its proposed separation from AOL. The merger of the corporations had originally been hailed as a "visionary attempt to meld old media with new media". However, the two corporations had difficulty working together, and AOL's revenue has been steadily falling from both a decline in paid subscriptions and the general movement away from dial-up in favor of broadband or cable (AOL lost 740,000 customers in just the last quarter).
Without AOL weighing down on their quarterly profits, according to Chief executive Jeffrey Bewkes, Time Warner will be able "to focus to an even greater degree on our core content business." With regards to AOL, Bewkes insists that the split will in fact allow AOL to "have a better opportunity to achieve its full potential as a leading independent Internet company."
So what are these two vague statements alluding to? Well apparently, internet advertising. According to the New York Times, AOL hopes to "expand its network that sells advertising on other Web sites." Meanwhile, Time Warner has plans to build "its advertising network and the Web sites it owns." So ... it seems to me, while the two corporations claimed to have such difficulty synergizing in the past, apparently they're each planning to pursue very similar goals once they're independent. Interesting.
I also find it interesting that while taking this class, suddenly I'm starting to see affirmations everywhere that internet advertising is the future of business. Perhaps in the current economy, internet advertising shows the most promise for media companies whose profits have taken a beating.
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