Word: merger
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...sources close to the government reported that Justice is still not amused. Throughout last week, the feds continued to favor the most draconian of penalties for Microsoft: a breakup of the software giant. The AOL-Time Warner merger may have altered the landscape today, the reasoning goes, but the government's antitrust case is built around events that happened in 1994 and 1995. Microsoft's business practices back then--stifling competition and bullying clients when it had market-share dominance--are the issue, not the company's position in today's media world...
...amused to read in an account of the press conference announcing the merger of Time Warner and America Online how AOL's Steve Case, who usually wears khakis and a denim shirt, put on a suit for the occasion, while Time Warner's Gerald Levin, who used to be a conservative dresser, showed up without a tie. The identity blur begins...
Then came the happy news. While I was naively prepared to believe the main purpose of the merger was to make more money for shareholders, all present assured us that the new entity was there to serve the public interest. Case: "Ultimately, this is about serving consumers." Levin: "The values that we feel we can leave as a legacy...have a lot to do with the social destiny of people everywhere...
...only that, but because this was not a merger between two companies in the same field--cyberspace being something new under (or rather beyond) the sun--they foresaw no antitrust problems, even though the $165 billion takeover is the biggest in history. "This thing is instantly available everywhere...so it's my view that this is kind of a clean break with the past," said Levin. "I don't see a regulatory problem." He is undoubtedly right as a predictor of government (in)action. Which is to say the takeover will probably be the beneficiary of the Robert Bork-Chicago...
Besides, editorialists at both the New York Times and the Washington Post tell citizens worried about media diversity and consumers worried about their pocketbooks to relax. This is a merger of cyber apples and earthbound oranges. AOL already has 20 million customers (about half the market) for the dial-up services that link computers to the Internet. Time Warner is already the world's biggest media conglomerate. Joining the two won't substantially increase either's share of its market. As the Post put it, "Down the road, there may be reasons to fear the muscle of AOL Time Warner...