Aol Time Warner Analysis
Aol Time Warner AnalysisCOMPANY OVERVIEW
OWNERSHIP STRUCTURE
Time Warner- America On-Line’s ownership
structure consists of the Board of Directors,
Senior Corporate Executives, and Senior Corporate
Officers. It is the largest Internet company in
the world. America-On Line aims to shape the
Internet Age through providing outstanding
services as a provider, partner, and a corporate
citizen. The company believes that social
responsibility is a very integral part of their
mission. They aim to provide the highest quality
products and services and to act with integrity,
and contribute to the common good. The company’s
corporate life and culture stresses on promoting
an ethic of volunteerism and civic engagement.
MISSION:
To become the world’s most respected and valued
company by connecting, informing, and entertaining
people everywhere in innovative ways that will
enrich their lives.
VALUES:
The company stresses on the following values:
creativity, customer focus, agility, teamwork,
integrity, diversity, and responsibility.
AOL TIME WARNER’S OTHER BUSINESSES:
In order to maximize the value of the company’s
combination of brands and other assets and to push
forward future growth that will revolutionize the
media and communications industry, their main
focus lies in subscription services, advertising
and commerce, and content.
Interactive Services and Properties: AOL
Networks: Turner Broadcasting
Home Box office
Publishing: Time Inc.
Time Warner Trade Publishing
Filmed Entertainment: Warner Bros.
New Line Cinema
Music: Warner Music Group
Cable Systems: Time Warner Cable
FINANCIAL INFORMATION
Following its $106.2 Billion merger with
Entertainment giant Time Warner, AOL managed to
fight off the first-quarter blues that impacted
nearly every other Internet company and posted
positive numbers. During the first quarter of
2001, AOL soared from $1.81 Billion to $ 2.12
Billion as ad and commerce revenue rose 37%
totalling $731Million.
Financial analysts were proven wrong when
revenues rose 9% from $8.32 Billion to $9.08
Billion. Analysts attributed the gains to some of
AOL’s cross-promotional activity with Time Warner
as well as its marketing might. In terms of
on-line advertising shares AOL controls 45% of the
total market.
Bob Pittman, the Chief Operating Officer of AOL
forecasts sales of $40 Billion this year, a 12%
increase over 2000 and $11 Billion before taxes in
earnings. Therefore increasing earnings 30% over
last year.
Though their stock has fallen from $69 last May
to $35 at present, the number of subscribers
continue to rise. In fact, AOL brings more than 31
Million total subscribers globally. The Company’s
reported net loss, including merger-related
expenses and pre-tax non-cash charges of $620
million reflecting the write-down of certain
investments in the AOL Time Warner investment
portfolio, was $1.4 billion, or $0.31 per share.
On the same basis in the year-ago quarter, the
Company’s reported net loss, including one-time
events, was $1.5 billion, or $0.34 per share.
In addition, the quarter’s specific highlights
include:
* Subscriptions: AOL Time Warner’s total
subscriptions grew to more than 133 million, a
nearly 16% increase during the year. In the
quarter, the flagship AOL service alone added more
than 2 million new members for a total of 28.8
million.
* Advertising and Commerce: Strong growth in
advertising and commerce revenues were led by
year-over-year increases of 37% at America Online
and 17% at Time Warner Cable.
* Share Repurchase Program: The Company
repurchased 14.1 million shares of its common
stock at a cost of $615 million, as part of its
previously announced program to repurchase up to
$5 billion over the...
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