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Tuesday, August 12, 2003

AOL Name Issue

The news yesterday that AOL-Time Warner is considering dropping the AOL from its name has predictably opened the way for another round of criticism in the press. (Jonathan Miller of AOL wrote in a memo, available at InternalMemos.com, that "there is no question this will provide the media yet another opportunity to write negatively about the merger of AOL and Time Warner"). See WaPo's Filter for a good roundup of coverage.

While everyone gleefully piles on AOL, I wonder if maybe they are overestimating the extent of the trouble. An interview with M&A expert Tom Taulli on the Business Week site today adds to my suspicion:

"After I just called AOL Time Warner one of the worst mergers ever, I do think that the company is in capable hands and is doing a very good job in dealing with integration and stabilizing the business. Considering the immense assets the company has, I think it's a long-term buy. I do think that we'll see that fuzzy thing called synergy take effect, and at some point three or four years down the road I could almost see a headline on the cover of BusinessWeek saying that AOL Time Warner did something right."

There is a lot of bitterness since the technology bubble burst, and we shouldn't let such feelings prevent us from considering a company's fundamentals first and foremost.