Saturday, June 03, 2006
End of Conglomerate Synergy? Time Warner Thinks so..
One of the aberrations during the shift from the industrial era to the network era was the Time Warner-AOL merger in 2001. Steadily, it appears that Time Warner has concluded that the synergey was never created and captured by the merger. Here is the WSJ article that provides a good update. Recall that Google and AOL entered into an equity stake recently. Google-Dell link to preinstall Google Pack. Yahoo-eBay link and so on. At the same time, mergers wont go away (Ebay + Skype is a recent example).
Will we see less mergers and major acquisitions and more alliances in the network era? I will have to say Yes unless managers still rely on the logic of industrial era focused on economies of scope that has proved elusive.