Company 's Bottom Line Of Divesting Aol

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Executive Summary
The purpose of this research paper is to examine the impact to the company’s bottom line of divesting AOL from Time Warner and of selling the AOL Europe holdings. The conversant Time Warner merged with AOL in 2001. This produced a loss in value to both entities. Since the merger, Time Warner has looked at ways to either increase its overall revenue through divesting units or portions of the conglomerate by acquiring other companies to help increase earnings potential. This paper looks at the impact to Time Warner if it divests its AOL unit and also what would be the best way to proceed with selling its AOL Europe holdings. This paper will take a historic perspective on memo 8 and memo 10 on this case study.
Internet pioneer America Online purchased Time Warner in January 2000 for $165 billion. This merger would become the biggest in history. At the time, Time Warner was considered to be the largest traditional media company, so the merger was to serve as an indication that timeworn and new media were in the beginning stages of convergence. The AOL/Time Warner merger involved a vertical combination of the biggest Internet content provider with a hefty cable system operator, which offered a channel through which broad band subscribers could have access to Internet content at high speeds. AOL had nearly 30 million subscribers worldwide and they would be positioned to attain access to Time Warner’s information and entertainment territory. They

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