or '''TimeWarner''' () ('''AOL Time Warner Inc.''' between 2001 and 2003) is the world's largest
Media company with major
Internet ,
Publishing ,
Film ,
Telecommunications and
Television divisions. The company is headquartered in
New York City .
Before this company was establish, there was a company called which was established in 1972 when
Kinney National Company spun off its non-entertainment assets, due to a financial scandal over its parking operations and changed its name.
It was the parent company for
Warner Bros. Pictures and
Warner Music Group during the
1970s and
1980s . It also owned
DC Comics and
Mad . Warner made (and later lost) considerable profits with
Atari , which it owned from 1976 to 1984.
In the
1970s , Warner formed a joint venture with
American Express , named
Warner-Amex Satellite Entertainment , which held cable channels like
MTV ,
Nickelodeon and
Showtime . Warner bought out American Express's half in 1984, and sold the venture a year later to
Viacom , which renamed it
MTV Networks .
In
1987 , it was announced that Warner Communications and
Time Inc. were to merge, though it took two years for the merger to take place. The last thing Warner did before the merger closed in
1989 was to buy out
Lorimar -
Telepictures . In early
1990 , the combined companies were named
Time Warner .
This company subsequently acquired
Ted Turner 's
Turner Broadcasting System on October 1996.
In
2001 , a new company called was created when
AOL purchased Time Warner. The deal, announced in
2000 , employed an unusual merger structure in which each original company merged into a newly created entity. The
Federal Trade Commission approved the deal on
December 14 ,
2000 . It was then subject to a public comment period of 30 days, until
January 16 ,
2001 .
There has been some speculation about the motivations of each party. Some observers believed that Time Warner was struggling to integrate "
New Media " into its business. A merger with AOL provided a huge subscriber base of Internet users, along with
Online marketing know-how. Many business journalists have reported that AOL executives felt that AOL stock was severely overvalued and that a big merger was the only way to prevent a collapse in valuation.
The merger faced immediate opposition by consumer groups and other media companies on
Antitrust grounds.
Media companies felt that the
Vertically Integrated AOL Time Warner would unfairly promote its own content within its outlets. This fear existed before the merger, but Time Warner was thought to be a conglomeration of very independent divisions. It was feared that this would change with the influence of AOL executives.
Consumer advocates were concerned with the threat of
Product Tying between Time Warner's
Cable TV systems and AOL's
Internet Service . Some consumer groups saw a possible attempt to corner the Internet-over-TV market, whereby AOL could force all of the Time Warner cable subscribers to use AOL branded Internet-TV. Smaller
Internet Service Provider s feared that AOL would tie its Internet service to Time Warner's
Cable Modem service. Some ISPs wanted the opportunity to use Time Warner's cable network as a
Common Carrier for their services, which competed with AOL. AOL and Time Warner pledged not to violate any antitrust regulations.
Many observers were shocked that a large, diversified media conglomerate was being acquired by a much smaller company. Market conditions at the time of the merger placed a greater premium on Internet-related stocks than on traditional media stocks. AOL's high
Market Capitalization relative to that of Time Warner made the acquisition possible. The deal has since become a symbol of the
Internet Bubble and is widely regarded as a disaster, with a $2.4 billion shareholder settlement, a further $600 million set aside and a $5 billion price boosting share buyback program announced on
August 3 2005 .
AOL
CEO Steve Case became executive chairman of the new company, while Time Warner CEO
Gerald Levin retained the CEO title.
After the merger, the profitabilty of the ISP division (America Online) decreased. Meanwhile, the market valuation of similar independent internet companies fell dramatically. As a result, the value of the America Online division dropped significantly. This forced a
Goodwill Write Down , causing AOL Time Warner to report a loss of 99 billion dollars in
2002 --at the time, the largest loss ever reported by a company.
In response to the huge loss in 2002, the company dropped the "AOL" from its name, and removed Steve Case as executive chairman.
Richard Parsons became the new CEO. Case resigned from the Time Warner board on October 31, 2005.
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Since the merger, a number of transactions have taken place:
- The Professional Wrestling company WCW was sold to competitor WWE for $7 million.
- The Atlanta Hawks , Atlanta Thrashers , and operating rights to Philips Arena were sold in mid- 2003 .
- The fifty percent share in the cable channel Comedy Central was sold to Viacom .
- Warner Music Group , a Music company, was sold to a group of investors led by Edgar Bronfman, Jr. in late 2003 .
- AOL/ Netscape 's longrunning litigation against Microsoft was settled out of court.
- Time Warner announced that it was shutting down its CNNfn financial information channel and disposing of its share in Google ( 2004 ).
- On February 6, 2006, Time Warner annouced that the Time Warner Book Group will be sold to French publisher Lagardere .
- On February 7, 2006, a group led by corporate raider Carl Icahn and Lazard Frères CEO Bruce Wasserstein unveiled a 343-page proposal calling for the breakup of Time Warner into four companies and stock buybacks totaling approximately $20 billion. On February 17, 2006, the Icahn-lead group agreed with Time Warner to not contest the re-election of TW's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn group's cooperation, Time Warner will buy back up $20 billion of stock, nominate more independent members to the board of directors, cut $1 billion of costs by 2007, and continue discussions with the Icahn group over their proposal, particularly on the future of Time Warner Cable.
- On February 23, 2006, Time Warner announced that Turner South , a regional sports and entertainment network in the south, will be sold to News Corp. 's Fox Cable Networks group.
Since
2003 , the Time Warner text logo appears in
CamelCase form ''(à la
RadioShack )''.
Starting in
September 2006 , Time Warner, the
Tribune Company (Which owns
The WB Television Network ), and
CBS Corporation (Which owns
UPN ) will partner with
The CW Television Network , although CBS and Time Warner will each own 50% of the network, and Tribune and CBS will have its stations become the network's affliates.
Time Warner Cable has since expanded and offers the following services:
The following enterprises are part of Time Warner:
- CNN , a world wide news company as well as a cable news channel
- HBO , Cinemax , Turner Classic Movies , cable Movie channels
- TBS Superstation , TNT , Cartoon Network , cable channels
- The WB television network (co-owned with Tribune Company )
- America Online and via its Web Properties Group:
- --- Advertising.com .
- --- CompuServe (Classic, 2000 and Basic), an Internet service provider
- --- Mirabilis , makers of the ICQ instant messaging program
- --- MapQuest , a WWW Map and direction site
- --- Netscape , a Web Portal and browser vendor, owner of the Open Directory Project and formerly leader of the Mozilla project
- --- Nullsoft , a software development group best known for Winamp .
- --- Singingfish , an audio and video search engine.
- --- Weblogs, Inc. , A network of weblogs including Engadget , TVSquad , Cinematical , AutoBlog and Joystiq .
- Time Warner Cable , a cable television company
- Time Warner Book Group publishing arm that includes Warner Books and Little, Brown And Company . Agreed to be sold to the Lagardère Group for $537.5 million in February 2006 {Link without Title}
- TIME , a weekly news magazine
- People , a weekly celebrity magazine
- Sports Illustrated , a sports magazine
- MAD Magazine , a humor magazine
- Fortune , Money Magazine , business and investing magazines
- Warner Bros. , a movie studio
- New Line Cinema , a movie studio
- Castle Rock Entertainment , a production company
- Atlanta Braves , a Major League Baseball team
- DC Comics , a Comic Book company
- Turner Entertainment , production company largely responsible for the distribution of the classic MGM , RKO , and Warner Bros. film libraries
- Turner Broadcasting System , responsible for managing several cable networks including CNN and Cartoon Network , as well as Turner Entertainment
- SportsNet New York , a regional sports network in New York City , jointly owned with Comcast and The New York Mets .
Time Warner also owns several other
Television channels and
Magazines , including
CNN Headline News and
Entertainment Weekly , as well as
Timelife books and music. See external links below for a complete list.
In 2004, Time Warner's
Market Capitalization was US$84 billion (2004). When the AOL-Time Warner merger was announced in January 2000, the combined market capitalization was $280 billion.
For fiscal year 2002 the company reported a $99 billion loss on its charges, almost all from a writedown of the goodwill (intangible asset) from the merger in 2000. (The value of the AOL portion of the company had dropped sharply with the collapse of the Internet boom, in the early 2000s.)
Time Warner Inc. owns several large properties in New York City; certain buildings in the Rockefeller Center complex and adjacent office towers house its main offices; one of which houses a
CNN news studio. In late
2003 , Time Warner finished construction of a new twin-tower complex, designed to serve as additional office space, facing
Columbus Circle on the southwestern edge of
Central Park . Originally called the AOL Time Warner Center, the 755-foot, 55-floor mixed-use property was renamed
Time Warner Center when the company itself was renamed.
As of November 2005.
