Friday, May 29, 2009

The Rewards of Hubris 

Time Warner has finally affirmed that it is spinning off what remains of AOL. The nine-year merger was a disaster from the beginning and cost Time Warner tens of billions of dollars with no return. It was trumpeted as a merger of new and old media and an unbeatable combination when first announced. Spin was in the air and business columns of every paper in America and many outside as well. Then it collapsed. AOL's dial-up dominance eroded quickly with the rise of broadband connections. It fell behind Google in online advertising and never caught up. It delayed too long in moving with developments on the internet. It became, as it is now, a textbook example of what not to do and a symbol of the hubris of CEOs. What is left of the company will now be given to the public with no great expectations for its future. The question is who would want to invest in it?


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