aol-time-warner-并购模型.doc

AOL’s Obsolete Business Model Hurt TWX J. Fred Weston and Brian Johnson Center for Takeovers, Restructuring and Corporate Governance, UCLA In December 1999, America Online (AOL) found itself in an interesting position. The firm reached its highest market capitalization of all-time, over $200 billion. The firm had gained this position through a combination of a large subscriber base, a robust advertising market, and a rising stock market which highly valued Internet firms. AOL was the most recognizable Internet service provider (ISP), connecting close to half of all users to the Internet. Despite the firm’s successes and the attention of the financial markets, AOL was a firm facing several potentially serious issues. These weaknesses prompted the firm to undertake a combination with Time Warner, the largest merger in history. AOL at Its Peak The ISP Industry The boom in Internet-related industries helped to fuel the U.S. economy in the late 1990s. Many different types of firms benefited from the popularity of these stocks (equipment makers, providers of online content like the media companies, online retailers, software makers, and ISPs). In its simplest form, the ISP provides the link for the consumer to access the Internet. Once connected, the user can run various software to access email, browse the World Wide Web, or perform other functions. Some ISPs, such as AOL, had their own proprietary software that enabled users to have added functions that were specific to that ISP, such as chat programs, special interest communities, and other functions. During the late 1990s, as money poured into firms related to the Internet, many new ISPs emerged. The ISP industry proved difficult for many of these firms. A substantial capital investment is required to get the necessary equipment up and running. This is magnified if companies seek to create a nationwide service. During this era, AOL maintained leadership of the ISP market, but many competitors emerged o