AOL-TWX Merger and Wireless Convergence

Strategic Insights -

The merger of America Online (AOL) with Time Warner and NextLink Communications with Concentric Network has significant implications for the convergence of wireless technology and the Internet. With NextLink's acquisition of Concentric, the company will offer high-speed Internet access and other data services to businesses, while AOL and Time Warner navigate their merger without wireless properties. However, America Online President and COO Bob Pittman hinted at acquiring wireless properties under the company name, citing the need for broadband access to all Internet users via wireline, cable, or wireless. The new company will have the capability to offer broadband access to all Internet users, with Phil Redman, associate director of the Yankee Group, predicting that AOL and Time Warner will move quickly to acquire wireless properties.

Key Takeaways:

  • NextLink's acquisition of Concentric will expand its offerings beyond voice services, providing high-speed Internet access and other data services to businesses in 38 U.S. markets in 14 states.
  • The merger of AOL and Time Warner will likely lead to the acquisition of wireless properties to provide wireless Internet services under the new company's brand.
  • Bob Pittman, America Online President and COO, hinted at acquiring wireless properties under the company name, highlighting the need for broadband access to all Internet users via wireline, cable, or wireless.
  • Phil Redman, associate director of the Yankee Group, predicts that AOL and Time Warner will move quickly to acquire wireless properties, leveraging their investment capital and presence in the Internet and media markets.
  • The merger is expected to lead to a significant player in the telecom landscape, with the capability to offer broadband access to all Internet users.
  • Steve Case, AOL Chairman and CEO, referred to new markets that the Internet must plumb to keep growing at the rate it has achieved.

Statistics:

  • NextLink's acquisition of Concentric is valued at $2.9 billion in an all-stock deal.
  • America Online's proposed merger with Time Warner is valued at $350 billion.
  • AOL shares fell from $73 3/4 to $60 1/16 between the Friday before the Monday announcement and the following Wednesday, a decline of 18.5%.
  • AOL's market capitalization is approximately $230 billion.

Sources:

  • Malcolm Spicer (Source not explicitly mentioned in the original text, but a paragraph from the text implies the author's name but omits the publication date or source.) (Unknown publication date)
  • The merger details of AOL and Time Warner (Undated)
  • The acquisition details of NextLink Communications and Concentric Network (Undated)
  • An article published in the New York Times (Unknown publication date)
  • A transcript of Bob Pittman's news conference (Undated)
  • A statement from Phil Redman, associate director of the Yankee Group (Undated)