The Critical 'I'

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Monday, December 22, 2003

PARSONS DEFINES AOL
off with you
What's ahead for media behemoth Time Warner? CEO Dick Parsons hints at horizontal acquisitions, thus keeping the company a player on the industry scene.

No real surprise there. TW can't help but be a factor in the media M&A market, given its dominant position. What I found interesting was Parson's vision for the once-high-flying AOL unit (late dropped from the corporate parent's name):

"What AOL really needs is to create a new business model... I see AOL as a kind of wholesale supplier. They add content and bring it together in a way that satisfies the consumers' needs. For example weather information, traffic and sport. In most areas we will not create content but rather we will dedicate ourselves to bringing it all together in a specific place."

Actually, this is how AOL has functioned from the start, really: As an aggregator and gateway to the online world. The old "Internet on training wheels" knock has actually been pretty successful; other Internet portals have strived to emulate the brand identification AOL built up in the early days of online/Internet service.

Still, Parsons' description serves as something of a demotion, in that AOL was once perceived to be the wave of the future for the entire media company. Now, it's struggling and finds itself in need of a redefined purpose. The mighty have fallen.