NEW YORK (Reuters) - Time Warner Inc., the world's largest media company, sees more consolidation on the Internet, as it mulls moves in the wireless and video games sector, its top executive said on Thursday.
The New York-based media conglomerate, whose 2001 merger with AOL wiped away more than $200 billion in shareholder value, has emerged this year as the only big media company with a clear Internet strategy: boost online advertising.
And Time Warner's rivals are playing catch-up.
News Corp. has purchased a handful of Internet companies over the past several months including the $1.3 billion purchase of MySpace.com owner Intermix Media and IGN Entertainment. Viacom has made smaller overtures, buying an online community games Web site called Neopets and iFilm, an online short-films site.
"It's inevitable," Parsons said of the recent Internet buying frenzy of its peers. "The little guys will ultimately be consolidated."
"Rupert (Murdoch, CEO of News Corp) and Viacom are making the right moves," he told New York media executives at a breakfast sponsored by the Newhouse School and The New Yorker magazine. "We're making the same moves."
Parsons' sentiments would have been unimaginable just a short time ago.
AOL, which purchased Time Warner in 2001, faced two government probes into its accounting, Time Warner was saddled with more than $30 billion of debt, and AOL's online service had lost more dial-up subscribers than most of its competitors combined.
"The timing was about as abysmal as one could hope for," Parsons said of the AOL merger. "The price was wrong ... We tried to make it work ... We just couldn't, not with the original structure."
Since then, Time Warner has divested its music division and cut its debt to $12.4 billion, transformed its cable TV operator into a media and telecommunications threat, and brought harmony to internal warring tribes.
And although it erased the AOL name from the corporate moniker in 2003, the company formerly known as AOL Time Warner, has now found itself in the Internet big leagues among other companies that survived the dotcom fallout.
"AOL has been discovered to be not dead," he said in a deadpan fashion, drawing chuckles.
Time Warner over the past year has had discussions with suitors including Microsoft Corp. and, in recent months, Google Inc. and Comcast Corp. over a possible joint venture, an outright ownership stake or some other type of partnership with
AOL.
These talks are aimed at accelerating AOL's transition to an online advertising-dependent business to offset a declining subscriptions business.
WIRELESS, GAMES UP NEXT?
Meanwhile, AOL has made four medium to small-sized acquisitions over the past year including another one in late September of Circuit City Stores Inc.'s MusicNow subscription digital music service.
On Wednesday, No. 3 U.S. cellphone service provider Sprint Nextel said it planned to form a $200 million, 20-year joint venture with four top U.S. cable operators including Time Warner and Comcast Corp. to bring television to cellphones.
But Parsons said the wireless venture was not likely his company's last. "We don't have a wireless answer yet," he said. "We're taking some shots in that space, we don't have it nailed."
Video games have also emerged as a key technology and entertainment sector whose retail sales now rival theater box office receipts.
Those statistics, combined with others that indicate adult males now prefer electronic entertainment over watching television, have piqued the interest of Viacom Inc.'s Sumner Redstone.
Turner Broadcasting, a unit of Time Warner, plans to debut GameTap, a subscription based video game network later this year featuring past arcade and console games.
"We're going to have to figure out our place in that space," Parsons said.
Time Warner may be open to making acquisitions, but Parsons said its approach has yet to be defined.
"We have to figure out how to live in that new world."
http://news.yahoo.com/s/nm/20051103/wr_nm/media_timewarner_dc;_ylt=ArZTgRjp9SajCuFetaGgYiIjtBAF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--
The New York-based media conglomerate, whose 2001 merger with AOL wiped away more than $200 billion in shareholder value, has emerged this year as the only big media company with a clear Internet strategy: boost online advertising.
And Time Warner's rivals are playing catch-up.
News Corp. has purchased a handful of Internet companies over the past several months including the $1.3 billion purchase of MySpace.com owner Intermix Media and IGN Entertainment. Viacom has made smaller overtures, buying an online community games Web site called Neopets and iFilm, an online short-films site.
"It's inevitable," Parsons said of the recent Internet buying frenzy of its peers. "The little guys will ultimately be consolidated."
"Rupert (Murdoch, CEO of News Corp) and Viacom are making the right moves," he told New York media executives at a breakfast sponsored by the Newhouse School and The New Yorker magazine. "We're making the same moves."
Parsons' sentiments would have been unimaginable just a short time ago.
AOL, which purchased Time Warner in 2001, faced two government probes into its accounting, Time Warner was saddled with more than $30 billion of debt, and AOL's online service had lost more dial-up subscribers than most of its competitors combined.
"The timing was about as abysmal as one could hope for," Parsons said of the AOL merger. "The price was wrong ... We tried to make it work ... We just couldn't, not with the original structure."
Since then, Time Warner has divested its music division and cut its debt to $12.4 billion, transformed its cable TV operator into a media and telecommunications threat, and brought harmony to internal warring tribes.
And although it erased the AOL name from the corporate moniker in 2003, the company formerly known as AOL Time Warner, has now found itself in the Internet big leagues among other companies that survived the dotcom fallout.
"AOL has been discovered to be not dead," he said in a deadpan fashion, drawing chuckles.
Time Warner over the past year has had discussions with suitors including Microsoft Corp. and, in recent months, Google Inc. and Comcast Corp. over a possible joint venture, an outright ownership stake or some other type of partnership with
AOL.
These talks are aimed at accelerating AOL's transition to an online advertising-dependent business to offset a declining subscriptions business.
WIRELESS, GAMES UP NEXT?
Meanwhile, AOL has made four medium to small-sized acquisitions over the past year including another one in late September of Circuit City Stores Inc.'s MusicNow subscription digital music service.
On Wednesday, No. 3 U.S. cellphone service provider Sprint Nextel said it planned to form a $200 million, 20-year joint venture with four top U.S. cable operators including Time Warner and Comcast Corp. to bring television to cellphones.
But Parsons said the wireless venture was not likely his company's last. "We don't have a wireless answer yet," he said. "We're taking some shots in that space, we don't have it nailed."
Video games have also emerged as a key technology and entertainment sector whose retail sales now rival theater box office receipts.
Those statistics, combined with others that indicate adult males now prefer electronic entertainment over watching television, have piqued the interest of Viacom Inc.'s Sumner Redstone.
Turner Broadcasting, a unit of Time Warner, plans to debut GameTap, a subscription based video game network later this year featuring past arcade and console games.
"We're going to have to figure out our place in that space," Parsons said.
Time Warner may be open to making acquisitions, but Parsons said its approach has yet to be defined.
"We have to figure out how to live in that new world."
http://news.yahoo.com/s/nm/20051103/wr_nm/media_timewarner_dc;_ylt=ArZTgRjp9SajCuFetaGgYiIjtBAF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--
