> Diseconomies of scale? Perhaps there is some hope for real news and
> editorial diversity...and less censorship in the future. Diane
That would be nice, but more likely, the FCC will conclude after their biannual review (in April) that weakness in the industry means that 'stronger' corporations should have the right to take over and 'save' the rest. My guess is that this news only makes Michael Powell more keen to increase media ownership caps, because the FCC continues to fail to examine or take responsibility for industry decay. Not that AOL's continued decline is a big shock.
> AOL Time Warner Inc., the world's biggest Internet service provider and
> media conglomerate, reported a 2002 loss of US$98.7-billion, the largest
> loss in U.S. corporate history, and announced that vice-chairman Ted Turner
>
> had resigned from the company.
>
> The loss resulted from US$99.2-billion in asset writedowns to reflect the
> falling value of assets acquired in the late 1990s, when optimism about the
>
> future of the Internet sent AOL shares soaring as high as US$94 in 1999.
>
> In the fourth quarter, AOL posted a net loss of US$44.9-billion due to a
> US$45.5-billion writedown of its Internet and cable-TV businesses. The
> non-cash charge was more than double what analysts were expecting.
>
Wait til 'analysts' get hit with the $50 billion in WorldCom writedowns to come, or the $24 billion from Qwest. Worse yet, the slew of ailing telco and media companies that have only started to 'amortize down' their goodwill because a full writedown would mean a full bankruptcy filing. So, companies like Lucent are taking little quarterly losses at a time which represent mere fractions of their true goodwill loss. But, it's all okay by current accounting standards.
> "Time Warner would've
> been much better off had the merger never happened."
So would have MCI before WorldCom, USWest before Qwest, Frontier before Global Crossing and every other company that was acquired with inflated stock as currency by a non-revenue non-profit producing predator in the wake of deregulation.
Time Warner employees will face the same problem as all the other stock-acquired company employees did, since stock in their retirement plans was summarily replaced with AOL shares which will continue to dive. ERISA has already filed a lawsuit against AOL for bad pension practices.
In a big deja vu, look for Comcast to grow in the very near term, all fat and bloated from its stock acquisition of ATT Broadband and then for it to plummet wiping out the retirement plans of the old ATT folks (the ones that didn't get fired in the merger).
The entire practice of using inflated stock to buy functioning, slower growth companies, screwing employee plans and jobs in the process, continues its slow meltdown. Meanwhile, Wall Street's bagging some nice fees selling off the AOL empire in parts, just like it did on the flipside when it put AOL TW together. Humpty Dumpty sits or falls, it's still a win on the Street.
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