Towards the end of the 1990s tech stock bubble, ‘new media’ – i.e., the Internet – was ascendant and old media like magazines, newspapers and broadcast TV were yesterday’s news. This was reflected in relative stock valuations, which gave Internet pioneer AOL the ability to buy venerable media giant Time Warner for what looked (accurately in retrospect) like an insane amount of money.
Now fast forward to 2017. Online retailing is crushing bricks-and-mortar, giving Amazon all the high-powered stock it needs to do whatever it wants. And what does it want? Apparently to run grocery stores via the acquisition of Whole Foods, the iconic upscale-healthy food chain.
The two deals’ similarities are striking, but before considering them here’s a quick AOL/Time Warner post-mortem:
15 years later, lessons from the failed AOL-Time Warner merger
(Fortune) – The landscape of mergers and acquisitions is littered with business flops, some catastrophic, highly visible disasters that were often hugely hyped before their eventual doom. Today marks the 15th anniversary of one such calamity when media giants AOL and Time Warner combined their businesses in what is usually described as the worst merger of all time. But what happened then will happen again, and ironically for the exact same reasons.
This post was published at DollarCollapse on JUNE 19, 2017.