Remember AOL Time Warner?

Junddep Junnarkar and Jim Hu, AOL to buy Time Warner in historic merger - CNET News, 2000

In a stunning announcement, America Online said today that it will acquire Time Warner to create the world’s largest media company.

The new company will be called AOL Time Warner and will combine AOL’s online services with Time Warner’s vast media and cable assets. In a world where online services, media and entertainment are rapidly converging, the new company could have almost unparalleled resources.

“It is probably the most significant development in the Internet business world to date,” said Phil Leigh, an analyst at Raymond James. “If it hasn’t been evident to most of us yet, it should be obvious to us now that the Internet is about audio and video and not just merely text and graphics.”

News of the merger, the largest in corporate history, sent Time Warner’s stock up at “dot-com” speed, with shares rising $25.31, or 39 percent, to $90.06. The stock has traded as high as $78.63 and as low as $57.19 during the past 52 weeks.

AOL, on the other hand, rose early but ended the day lower, falling $1.88, or more than 2 percent, to $71.88. The stock has traded as high as $95.81 and as low as $32.50 during the past 52 weeks.

The purchase, an all-stock deal, amounted to more than $160 billion based on today’s trading prices. According to both companies, the new firm will have an estimated combined value of $350 billion.

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Today’s deal also gives AOL access to Time Warner’s media properties such as CNN, Warner Bros., Sports Illustrated and many others.

The new company will have more than 100 million paying subscribers, including AOL’s dial-up customers and Time Warner’s cable and magazine subscribers, AOL chief financial officer J. Michael Kelly said at the news conference.

Steve Case, the chairman and chief executive of AOL, will become chairman of the board of the new company. Time Warner’s Levin will become AOL Time Warner’s CEO.

[…]

Analysts said that the Net landscape is likely to change rapidly over the course of the year as large capitalized Internet firms look to acquire media companies. Web portal Yahoo has a market cap of $107 billion—far greater than some leading media companies, including Disney, which has a cap of $64.19 billion.

“About 18 months ago, the feeling was that some of the media companies would buy Internet companies, but what happened is that the valuations got so reversed that it is really the opposite that is likely,” said Raymond James’ Leigh. “With 55 percent of the new company’s stock being controlled by AOL shareholders, I think AOL is in the driver’s seat. Today’s deal is psychologically a big step, and now it is likely that we will see others come along.”

For all those folks who forget how much of a world-beater AOL Time Warner seemed, and how well positioned it was for the broadband era just over the horizon.

The same is being said now about Facebook.