AOL Time Warner: A Merger Gone Wrong |
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EXCERPTS Contd...A Few Strategic BlundersA major setback to the success of the merger was the bursting of the Internet bubble, which was expected to rule the media and entertainment industry in the 21st century. When the Internet bubble burst, there was a steep decline in subscriber growth for AOL, which led to a steep decline in its advertising revenues.
The Empire Starts CrumblingDue to continuing decline in revenues and fall in share prices (which further declined after the September 11 (2001) attacks (on WTC), Levin announced that the company would not be able to meet its pre-estimated earnings.
Will Things Get All Right?In August 2002, Jonathan Miller (Miller), former executive, USA Networks, was appointed as the CEO. Following this, the company undertook a reorganization of the AOL division. Stating the objectives of the restructuring, Miller said, "AOL must maintain its leadership position among dial-up subscribers, enhance our broadband business and reinvigorate our relationship with marketers." Miller said that he wanted to reduce the number of hierarchical levels in the AOL division to ensure control of the division. As part of the restructuring, new divisions were created to develop new products, brands and technologies... Exhibits
Exhibit I: Major Events at AOL |
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