Speaker unverified: uncertainty

Transcript context

…Charlie Rose. That’s great. Yeah. Steve Case vowed that one day, AOL-Time Warner would have $100 billion in revenue. It would be the world’s first trillion dollar market cap company. There’s a quote from Roger McNamee the venture capitalist who says, “Let’s be clear. This is the single most transformative event I’ve ever seen in my career.” Kara Swisher has a quote from her book where she says, “In one major move the two companies had seemingly addressed both of the their weaknesses and intensified their strengths. I won’t deny that I really believed that as did many others, many of whom now pretend they never did.” I mean, this is January of 2000. This is the height of the bubble. What’s also happening around this time, the Microsoft antitrust trial has come to an end. It looks like Microsoft is about to be broken up. Who looks like it’s the new king of the technology hill? It’s AOL of all people. What happens is, so the deal is announced in January of 2000. Four days later, the Dow Jones Industrial Average peaks at a level that it would not return to for more than six years. On March 10, 2000, the NASDAQ peaks at a level that it would not reach again until March of 2015, losing 80% of its value at its low. The bubble burst. And we’ll get into culturally why the acquisition was a disaster. The merger was a disaster. But again, the reality of it is not that people stopped doing dialup. Actually until 2002, the dialup subscriptions were still growing. It peaked at 26.7 million. The thing that kills this deal is that as soon as it happens, all of those deals that AOL did with the dot com companies disappear, evaporate. I’m not just saying that the three-year deal runs out. I’m saying that the companies are bankrupt and are not going to be sending you any more checks. So essentially, that insane growth in advertising that had so excited Wall Street, at some point Wall Street was estimating that AOL by 2003 would have more advertising revenue than in the ABC or a CBS in television. Like they’re thinking this is it, this is the next big thing. Goes away almost from the moment that the deal happens. Culturally, I don’t know how interesting this is but those AOL cowboys move in, they try to tell the Time Warner guys “Okay, we’re going to run this like a tech company now. ” It’s like the host body rejecting an organ. Time Warner was always notorious for having these warring fiefdoms of “I control magazines. You control cable. You control book publishing.” And not as similar from AOL. I mean, AOL had the internal fiefdom culture too. You mix two of those together, that can’t go well.…

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