When the two companies first merged back in 2001, they had competing interests. Today, they're both focused on creating content.
America Online acquired Time Warner for more than $165 billion in stock and debt in 2001 in what is widely regarded, retrospectively, as the worst partnership ever. In December 2009, with a number of big companies talking about joining forces, PBS looked back at the AOL-Time Warner tie as a way to caution others; PBS called AOL-Time Warner "one of the biggest failures in merger history." But here's a crazy thought: A decade after that merger, Time Warner and AOL are completely different companies. The two might make a much better pair the second time around.
The idea behind the 2001 merger sounded perfect: one of the world's largest distributors of online content meets one of the world's most recognized content-making companies. But the companies were too different, and their mismatch led to failure.
At Time Warner, content has always been king. It's a content company with powerful brands, among them CNN, HBO and Sports Illustrated. Editors ruled the halls and their product trumped all else. At AOL, according to Larry Kramer, a former Washington Post editor and one-time CEO and chairman of MarketWatch, "it was the equivalent of the 'circulation' and 'marketing' departments that ran the company." With AOL's customers forced to stay on the AOL platform, nobody worried about the quality of the editorial products being served. They just worried about sending out CDs and luring more people in, "selling connectivity to the Web, not an editorial product," according to Kramer, who wrote about the merger in 2009, a week after Time Warner decided to spin off AOL for good, in the Daily Beast.