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The Roots of AOL's Troubles

POSTED: 05:43 PM ET, 02/ 6/2008 by The Editors

Seven years after it submitted to a takeover by America Online, Time Warner is still feeling the hangover from what was then the biggest merger in U.S. history. The company long ago took the "AOL" out of its name, divorced itself from the Internet upstart's executives and made the Dulles-based company just another one of its divisions. But still the business has continued to shrink, and Time Warner said today it is splitting its AOL division into an online advertising unit and a dial-up access unit, a move many analysts expect could lead to the sale of the access business.

A historical reminder: One reason Time Warner thought AOL would be a good partner in the year 2000 was that its advertising revenue seemed to be going through the roof. But as The Post's Alec Klein later reported in a landmark investigation, AOL was making unconventional deals behind the scenes that made its books look better than they were.

AOL went on to pay some $3 billion in fines and settlements with the government and shareholders who said the company had misled the public about its financial condition.

By The Editors |  February 6, 2008; 5:43 PM ET
Previous: HUD Secretary Allegedly Intervened for Friend | Next: Ethics Standards

Comments

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It chagrins me that AOL is failing. For rural people, dial-up is still the ONLY option available, and AOL has been a reliable ISP. With no cable or DSL access, people in the countryside will be discriminated against, their opportunities for running a web-based business will become even more narrowed, and talent will languish.
Who will pick up the slack if AOL goes belly up??

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