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Time Warner And AOL Finally Part Company

sjohnson
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Posted May 28, 2009 - By Stephen Johnson

AOL DiscThe final curtain closed today on the original web boom of the late 1990s and early aughts: Time Warner has announced that it  will be separating fully from Web 1.0 giant America Online. Thus, an era ends.

Time Warner Chairman and Chief Executive Officer Jeff Bewkes said in a statement: “We believe that a separation will be the best outcome for both Time Warner and AOL... The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”

Ouch! Somehow I doubt AOL will become a leading independent anything, but the company plans to continue running its web brands and services, as well as its advertising business and its internet subscription services.

For you younger readers, America Online began as one of the most popular dial-in online networks. It was like a miniature internet without porn. AOL was totally private, and you payed a monthly subscription fee plus per-minute charges to access media controlled entirely by one company. This was very popular at the time because, for most people in the mid 1990s, there were few other options. 

After the service became ubiquitous (mainly by mailing everyone in the country free-trial CDs), AOL decide to buy media conglomerate Time Warner for an estimated 160 Billion dollars, instead of curing Malaria forever or ending world hunger. This was back in 2000, when people had high-hopes for internet ventures. Anyone who actually used the internet back at the turn of the century did not have high hopes. It was clear that AOL had jumped the shark about two years before the acquisition of Time Warner and was destined to fail, epically, because once people were given access to the internet at large, AOL seemed pretty ridiculous, like swimming in a kiddie pool in the middle of an ocean. Even when AOL Time Warner was the biggest media company in the world, you could see the cracks starting.

How bad of a deal was the acquisition? According to Richard Morgan, assistant managing editor at The Deal, it possibly ranks as the worst deal of the century.

If you want a taste of what AOL was like back in the day, I urge you to log in to Facebook, and imagine you can't view any internet pages that aren't connected to Facebook. Now imagine you have to pay for every minute you spend on the web page. That's a fair approximation of what it was like. Not to be too harsh on the service, though: It came along before the World Wide Web, and featured graphics when the entire internet was text-only. So AOL really was a forerunner of most of what we use the internet for today. AOL introduced a whole population to text messages, email, message boards, online games, and other things we take totally for granted today. The problem was, it stayed with a dial-up model when the world was going broadband, and didn't manage to change with the times. By the time the company shifted, the online world had passed it by.

Time Warner And AOL Finally Part Company
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