Restructuring / Turnaround Strategies Case Study

America Online: The Restructuring Strategies

Abstract:
n the early 21 st century, the technology sector experienced a significant number of mergers and acquisitions among the old and new economy companies. The merger of America Online (AOL), America's largest Internet service provider with the media giant Time Warner, in 2001, was considered as one of the largest mergers in the technology sector. However, the merger failed to deliver the desired synergies. AOL, one of the subsidiaries of the merged entity, Time Warner, was the worst affected and it continued to experience a decline in the customer base. Jonathan F. Miller, who took over as CEO in August 2002, the third in a period of four months, implemented certain measures to revive the company.

Pedagogical Objectives:

• To understand the reasons for the failure of the two companies in realising the expected synergies of the merger
• To discuss the restructuring initiatives of John F. Miller to revive the company’s fortunes.

Keywords : America Online; Time Warner; Restructuring Strategies; US Securities and Exchange Commission (SEC); Mergers and Acquisitions; Inorganic growth; Media and Telecommunications services; Restructuring / Turnaround Strategies Case Study; Internet Service Providers; Growth strategies; Premium narrowband, broadband service; Jonathan Miller; Robert Pittman; Market Capitalisation; Competitive Strategy