FROM THE TUSTIN NEWS, THURSDAY, JAN 27, 2000
THE DOC IS IN...
WHAT AMERICA ON LINE/TIME WARNER MERGER MEANS
On Monday, January 10, America On Line (AOL) and Time-Warner announced one of the largest corporate mergers in history. All week long, Steve Case and Jerry Levin, the two Chief Executive Officers, appeared on news and talk shows explaining the momentousness of their joining.
After listening to all the hype I asked myself if this was going to affect the way I use the Internet in general and here in Tustin in particular. And I think the answer is no, at least for the time being.
When Tim Berners-Lee first designed what we know as the World Wide Web, he envisaged it as a great library of documents. That is, I could write the great American novel and publish it on the Web. John Jones in South Africa could publish the history of his family on the same Web. And Juanita Garcia of Guatemala could put up pictures of her new baby. All of our documents would freely be available to citizens of the networked community to use as they saw fit. We all belonged to this great democratic wired community and could freely make our information available to all.
After this proposed merger I think this still generally will be true, for a while anyhow. So what is the merger all about?
In effect, AOL needed this merger. It needed it because, even though they are the largest Internet service provider, with upwards of 20 million subscribers, all these subscribers use telephone dialup. This in a world where the future is in high-speed connections, or "broadband," which means that you need access to cable. Time-Warner has around 20 million cable subscribers. And the major players are betting that cable will become the way consumers get their Internet connections in the future.
Time-Warner on the other hand, thinks that it needs Internet presence. They have content. They own magazines, movie studios and great cable brands like CNN. But, again the major players are thinking that the future is on the Internet and the measure of success is in counting "eyeballs," that is, the number of people who view their web sites. So the merger made sense for Time-Warner.
If this merger is consummated, will it make any difference to you and me? This is hard to judge. In our area, Time-Warner is not our cable provider. So for those now using AOL, getting high-speed access means that they will have to change Internet service providers unless the government forces the existing cable companies to share their wires with others. AOL might actually lose customers.
But what about the future? Michael Wolf of Booz, Allen and Hamilton, the consulting firm, postulates that the Internet is a transitional media and that television and the Internet will merge into an infotainment medium. In order to survive in this new medium the players have to be large and possess content, connectivity and Internet savvy like the new AOL-Time-Warner combination.
It is an old marketing axiom that "dogs have to eat dog food," and the big players will be the suppliers of the dog food.
This probably is true but I don't have to like it. The Internet already has been commercialized. You can't visit a Web site, except possibly mine, without having to wade through advertisements. Not much on the Internet is "free" anymore. In the future I can see us sitting in front of a TV screen with a wireless keyboard on our laps selecting what movie to have downloaded from Time-Warner tonight. They already will have our credit card information so we won't have to worry about how to pay for it. In the upper left of the screen we can watch the latest news on Time-Warner's CNN.
But by then there still will be choice. After all, AT&T probably will have merged with Disney and Yahoo will own Earthlink and a movie studio. A brave new world. You still can get John Jones's family history and Juanita Garcia's pictures but you would have to look hard to find them. And of course we still can look for a paella recipe on the World Wide Web but we wouldn't do that until after we have checked the stock market on Time-Warner's CNNfn.
Does this sound far fetched? Not if the big players see
the future correctly. Our Web of today will become an
"infotainment-web." Tim Berners-Lee's dream will become diluted. I
don't know whether to protest or go with the flow. Only time will tell.
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