Merger ushers in the connected century

Digital age: AOL-Time Warner enterprise could define 21st century just as railroads defined the 19th.

January 15, 2000

IT'S fitting that America Online's merger with Time Warner Inc. took place a little over a week into the 21st century. The union of two companies that represent new and old information technologies is a harbinger of what's to come.

Their merger symbolizes not only the rapid reshaping of the world's communications industries that is under way but also the transformation of world business practices. This is the beginning of a wave of mergers between Internet and media companies.

What happened to railroads in the 19th century is probably most analogous to the enormous changes that would flow from the AOL-Time Warner merger.

Just as railroads opened the American frontier, united the country, created new markets and stimulated technological innovation, the new information companies will revolutionize our lives.

All types of information, including voice, data, television, music, movies -- anything that can be converted into digital signals -- will be seamlessly delivered through televisions, computers, wireless phones and gadgets yet to be invented.

For consumers, this new information highway means a wide variety of services.

You'll be able to choose from many types of entertainment and not passively accept programming as we do today. You will communicate with friends and family via voice, video or e-mail.

For businesses, the opportunities are immense.

Retailers will streamline their operations and cut costs by selling goods from warehouses. Businesses will communicate and manage through this digital system by relying on central, interactive databases, video conferencing and instantaneous communications.

AOL has been thought of as an Internet company, but that understates its true accomplishment. It has created a digital architecture that can deliver myriad interactive information.

By teaming up with Time Warner, it adds content -- news, magazine articles, movies, television shows, music and games -- that can be delivered digitally.

Given the comprehensive nature of this information network, people will find themselves compelled to be online frequently to read e-mail; download articles, movies and games and purchase goods and services.

The opportunity of cross-marketing various entertainment products is also a danger. Instead of delivering news, Time magazine, CNN or even People magazine could easily become vehicles to shill another division's latest movie, CD, video or television program. It will take people of exceptional independence to maintain the integrity of AOL-Time Warner's news operations.

The other danger that arises out of this union is the opportunity of this company to learn more about individual consumers than ever before. Every Internet hit, every purchase and every download can be recorded, stored and retrieved.

We are likely to witness tumultuous changes in the next few months and years. When this phase of the digital transformation is completed, consumers could have nearly unlimited entertainment and information choices, receiving their selections more quickly and more clearly than anything imaginable today.

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