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Recently in Salon Technology

Column
The wrong stuff
In the future, predictions of the future will be as off-base as they've been in the past.
By Scott Rosenberg
[01/07/00]

A hair-raising scheme
Luring fans to "go with the Flowbee," the vacuum-powered star of late-night infomercials caters to its online community.
By Damien Cave
[01/06/00]

The love machines
We test-drive the new, Internet-based, remote-controlled sex toys -- so you don't have to.
By Tricia Baldwin
[01/05/00]

Predictions for 2000
Cowhide computers, Russians in Redmond and other tech possibilities for the new year.
By Janelle Brown, Mark Gimein and Kaitlin Quistgaard
[01/04/00]

Technology: View from the top
"Competitive strategy is not an end in itself"
HearMe's Paul Matteucci talks about the future, the Stanford mafia and what Silicon millionaires are going to do with their money.
By Mark Gimein
[01/04/00]

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After years of viewing Microsoft as the 800-pound gorilla in the Internet business, the world woke up Monday morning to news of America Online's purchase of Time Warner. Oh, it was formally called a "strategic merger of equals" in the press release -- in deference, no doubt, to the many egos atop the Time Warner hierarchy. And it's true that Time Warner's Gerald Levin gets to be CEO of the new company.

But over on the AOL.com site a headline reported, "AOL To Buy Time Warner for $166B" -- and that's the truth. The new company may be named AOL Time Warner, but in this equity-crazed age, what counts is the ticker symbol. And AOL's 55 percent share of the new company means that stockholders will type "AOL" into their browsers to see how the combined entity is faring in the market.

Also Today AOL reaction The Net on AOL's Time Warner deal By Janelle Brown, Damien Cave and Lydia Lee Bigger, fatter, richer Inside the Time Warner media empire there was a whole lot of smiling going on Monday. By Sean Elder

On the surface, what happened Monday is simple: AOL, the leading provider of dialup Internet service, needed a strategy for moving its customers forward into the much-ballyhooed world of high-speed "broadband" access, controlled by telephone companies and cable TV operators (such as Time Warner). Time Warner, the ungainly media conglomerate, needed a credible way to salvage its Internet strategy after a decade of failure in the digital realm -- from the colossal flop of its "Full Service Network" interactive television experiment to the spectacular flameout of its misconceived Pathfinder Web portal.

Put the two companies together and you get something like Monday morning's press conference announcing the deal: A torrent of references to "synergy," "one plus one equals three," "the media value chain," "the convergence of media, entertainment and communications," and "new benefits to consumers." You also get an avalanche of hype: One analyst declared, "It is probably the most significant development in the Internet business world to date."

There's no question that the combined company -- which weds AOL and Netscape to the full Time Warner stable of cable networks and cable service operators, publishing firms, movie studios and music companies -- will boast impressive market share and power. If Microsoft still thinks it has a chance to challenge this colossus in the media business, the software company is even more arrogant than its enemies paint it.

But that doesn't mean the future is necessarily golden for AOL Time Warner.

Here's what the people on that press conference podium didn't say: These companies leapt into bed not because they felt confident but because they felt insecure.

Next page | How, exactly, will AOL Time Warner be "socially conscious"?