Between January 1998 and January 2000 Time Warner’s stock saw a 1300% increase as it grew to become the second largest cable provider in the United States. Time Warner had grown into a major player in the media industry through a number of high profile mergers and acquisitions. In 1998 Time Inc. and Warmer Brothers merged in a deal where Time bought Warner Brothers for $14.9 billion. Gerald Levin, who had been CEO of Time Warner since December 1992, had done an excellent job in the eyes of the shareholders. Despite his remarkable success in his first eight years as CEO, CNBC named Levin as one of the “Worst American CEOs of All Time.” Levin was able to earn this distinction primarily in his leadership role in the …show more content…
Case felt that the vertical integration of the two companies would promote synergy. They believed Time Warner could gain from AOL’s experience and brand recognition in the new Internet industry while AOL would benefit from Time Warner’s cable infrastructure. The two CEOs noted that both companies had comparable values that would mesh well together. Both sides had been interested in merging with another large company in a related industry. AOL “had been plotting for months about how to use its high-priced stock to make a big acquisition. The company hired the investment bank Salomon Smith Barney… to consider various targets.” AOL was in talks with eBay and Electronic Arts while Time Warner was discussing a merger with Yahoo. Levin and Time Warner felt that they had transform their company in order to be competitive in the fast paced Internet age. AOL feared that if they did not move quickly to offer high-speed cable Internet their market share would vanish.
The two CEOs moved quickly and privately. After a few dinner meetings with Case, Levin discussed the deal with Richard Parsons, Time Warner’s president—he thought it was a good idea. Levin only discussed the deal with a few top executives and a deal was made in early January 2000. The deal was announced publically on January 10, 2000 and at a value of $350 billion, it was the largest merger
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However, a stock drop in the U.S. market is not historically unusual for impending mergers. So, all things considered, it looked like this might be a great combination.
AT&T recently acquired DirecTV after the latter’s shareholders voted to endorse the acquisition or merger. The acquisition was first endorsed by the boards of these companies in May 2014 before being subjected to a review by anti-trust regulators in the Department of Justice and Federal Communications Commission (England-Nelson, 2014). The approval of the acquisition would result in the merger of the country’s largest wireless carrier with the biggest satellite TV provider in the country. The merger between these two firms is geared towards creation of a leading content provider across various platforms i.e. video, mobile, and broadband services. However, the acquisition was influenced by various factors and is associated with several significant effects in light of the organizational structure.
In September of 1996 superstores Staples and Office Depot, had developed a proposal to merge, in the following month the companies had gone and met with the FTC to let the agency know that both companies had an intention to merge into one company. Both Staples and Office Depot are both office-supply stores, and had decided to merge in order to keep the costs low as well as keeping their consumers happy. The FTC, however, didn't like the companies' idea of merging so the staff decided to launch an investigation of the proposed merger in order to determine if the companies would violate the anti-trust laws. This, however wasn't approved by the FTC, and a lawsuit was soon followed, questioning the companies, which resulted with both Office Depot and Staples challenging the FTC's decision vigorously. This case was set before both an administrative judge and a federal judge. However, the federal judge was considering whether or not to issue an injunction during this time.
Comcast Corporation is a company in the services sector in the cable and broadcasting industry located in the United States that offers media, entertainment, and communications. The Corporation is headquartered in Philadelphia, Pennsylvania (Comcast, 2016). This paper will be an extrapolation of Comcast’s history from the day it was founded to its current stature.
Comcast CEO Brian L. Roberts described the deal as a "perfect fit" for the company, as Comcast would be able to bolster its role as a creator and distributor of content, with a particular emphasis on " multiplatform anytime, anywhere media that American consumers are demanding"; increasing access to NBC-owned content through various platforms. The deal would also add Comcast's own cable channels to NBCU's existing suite of cable networks, contributing to 82% of the merged company's total revenue. Despite the focus
In the editorial “Verizon’s AOL deal: ISPs go searching for content”, by The Times Editorial Board, points out the important benefits that Verizon acquired by buying AOL, the most popular dial-up internet service in the country. The principal reasons of the agreement to buy AOL and the benefits they received are: AOL’s content business, the subscriber's exclusive content access, and the probability to have preferable treatment to sites and services for their customers. First, Verizon's smart move was to obtain primarily the business content from AOL. All the advertising tools from AOL are an important investment for the future of Verizon's strong standing. Another benefit that Verizon obtain from AOL was the subscribers
Whether a Yahoo acquisition can lead to even a small share of “balance of power” in digital advertising is the big question. Yahoo plus AOL would give Verizon, the largest wireless telecom provider in the US, a reported 5 percent share of digital ad revenues globally. The most common argument is that Verizon is over paying for two things: a competitive content platform and better ad tech. Beginning with content, there are four kings: Google, Facebook, Snapchat and Netflix. Then we have a distinct second tier: Twitter, Hulu, Amazon and Microsoft.
In the article “A Good Stock to Own, A bad Place to Work” based on the network company DISH that was founded in 1992 by Charles Ergen, many former or current employees had felt that the company had treated them negatively. Employees of the company had also felt that they were treated with injustice, held to poor standards, and used by the company they worked for. Many issues for DISH derive from the structure of the company and it’s handling of those in the workplace. These issues derived from DISH having an organization that lacked ethics, teamwork, as well as diversity issues and most importantly a company founded on Machiavellianistic standards.
Share holders suffered even more, as stock prices plummeted from the time the merger was first announced. A major part of the failure of this merger was the fact that developing a “learning culture” was never considered, and no strategic vision was created for the newly merged organizations. For example Time Warner Cable’s high speed Internet services, Road Runner, as part of its profitable cable operations was never integrated with AOL as Case explained in his 2005 article in the Washington Post (6/ 11/05: B01). The first AOL Time Warner Annual Report (2000) claimed that it was fostering “… a nimble, entrepreneurial culture that recognizes that it can only succeed if everyone supports the new organization based on a shared set of values and common goals.” Unfortunately, the team-work necessary to integrate the two companies never happened, because there was no shared strategic vision of what the merger should be, and where it would be going. Merger Failure and the Need for a Culture of Learning According to some estimates, 85% of merger failures are related to the mismanagement of cultural issues. Awareness of cultural differences is then seen as an issue of primary concern when organizations merge. According to Miller (2000:8): “Once you develop an understanding of the current culture, and have compared that with the goals of the merged
Time Warner is also taking part in joint ventures which bring it more opportunities to advertise and sell its products. For example, in 1993 Time Warner and US West worked together to improve U.S. cable systems to an interactive fiber-optic data highway that could lead to such direct services to the home as music on demand and video on demand. This deal was based on U.S. West investing $2.5 billion in Time Warner Inc. which gave them a big stake (25.5%)in
Headquartered in Texas, Teletech Corporation operates under two main business segments: the Telecommunications Services segment, providing various telephone services to business and residential customers and the Products & Systems segment, which manufactures computing and telecommunications equipment. In late 2005, the Securities & Exchange Commission revealed that billionaire Victor Yossarian acquired a 10% stake in Teletech and demanded two seats on the board of directors. He felt that the firm was misusing their resources and not earning a sufficient return. He stated that Teletech should sell off its Product & Systems segment and focus on creating value for the company’s shareholders. A detailed analysis will reveal
“AOL is a leader in the digital content and advertising platforms space.” (3 Concerns Consumers Should Have About the Verizon/AOL Merger. (n.d.). Retrieved May 25, 2016, from http://www.blackenterprise.com/money/consumer-affairs/3-concerns-consumers-should-have-about-verizonaol-merger/). Acquisition with Verizon will give opportunity to AOL to expand distribution of advertising. “The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy,” said Tim Armstrong, AOL’s chairman and CEO.
When the proposed merger of the Travelers Group financial giant and banking's Citicorp was announced in April 1998, the news stunned the financial industry; involving some $76 billion in stock, it was at the time the largest merger in history. For Wall Street's latest superstar, Travelers chairman and CEO Sanford "Sandy" Weill, not only was the merger a step closer to the creation of the huge international diversified financial services institution he had been dreaming about for over a decade, but its audacity and risk was in step with Weill's reputation as a corporate visionary who was as savvy as he was fearless2.
Recently, Time Warner collaborated with other media companies by acquiring a small percentage of Hulu, in an effort to sustain a future in the new trend of online streaming services. TW invested a hefty $583 million cash stake, joining forces with other media giants Comcast, Walt Disney, and 21st Century Fox. The timing is the reaction Time Warner is making to the onset of major competitors on the horizon such as Netflix and Amazon, and they have a long way to go to catch up. The timing was also based on Hulu’s need for big capital to stay afloat. They were on the verge of suffering a crippling $500 million loss, which the funding from TW alone saved them from. As stated by Time Warner’s CEO, Jeff Bewkes, “Our investment in Hulu underscores Time Warner’s commitment to supporting and developing new platforms for the delivery of high-quality content and great consumer experiences to audiences around the globe,”.
MTC and Leo are the two mobile providers in the country while Telecom Namibia continues to hold a monopoly over the fixed line market.