Some Apprehensive Musings On The AOL Time Merger

By Charles W. Moore

While I can't put my finger on any compelling specific reason to oppose AOL/Time a concentration of power in the media of this magnitude -- online or otherwise -- puts me in mind of WeSaySo Corporation, the mega-conglomerate that ran everything in the old Dinosaurs sitcom.

Microsoft-haters are of course rubbing their hands in gleeful anticipation of a score-settling shootout between the AOL/Netscape/Sun Microsystems/Time- Warner gang and the Gates outfit. However, that begs the question of which 900 pound gorilla we should fear most. At $163-billion in stock, the AOL takeover of Time-Warner is the biggest corporate merger in history, and it will give AOL leverage in a far more comprehensive spectrum than Microsoft influences. AOLTime Warner's current stock valuation of roughly $318-billion nearly equals Canada's entire annual economic output.

At least we have a pretty good idea who Bill Gates is and what motivates him, even if we don't find it all entirely admirable. What do we know of Steve Case and Gerald Levin?

AOL honcho Case, 41, who will be chairman of the merged companies, said both partners

are run by entrepreneurs "who want to run a business and want to change the world." The goal of the merger, Mr. Case stated, will be to "fundamentally change the way people get information, communicate with others, buy products and are entertained."

"This is not just about big business. This is not just about money," said Time Warner chairman Gerald Levin. "This is about making a better world for people because we now have the technology and the instruments to do that."

Neither Mr. Levin nor Mr. Case provided any specifics with regard to their plans "to change the world." The problem I see is that however well-intentioned such plans may be, they will represent the vision of a very small number of individuals who will have the power to impose that vision with fewer and fewer checks and balances.

I also have grave misgivings about this much vertical integration in the media. When the same company owns the world's most popular TV news and movie networks, the world's best-known weekly newsmagazine, the world's biggest Internet service, one of the world's largest film studios, and so on and so on, one has to anticipate that some of the fourth estate's critical edge is going to be blunted.

AOL has 20 million Internet customers with Time Warner's 11 million cable subscribers and the 120 million magazine subscribers. Between them they employ more than 81,000 people.

This sets off alarm bells for me. The Internet, in my perhaps too-idealistic view, has provided a democratization of information distribution. The freedom of the press no longer exclusively resided with "the man who owns one." Anyone with access to a computer and an Internet connection could now freely publish whatever they wanted. Of course, this has resulted in an explosion of badly-written, unedited, half-baked claptrap cluttering cyberspace, but at least a variegated selection of views get expressed.

Anyway, is Web-content so different from the badly-written, half-baked claptrap that gets shovelled our way by the major TV networks these days? In an era where a boring, voyeuristic greed-fest like "Who Wants To Be A Millionaire?" becomes the hottest property on TV, standards have fallen pretty low anyway.

Getting back to vertical integration, another potential hazard is increasing proprietization of the Internet. This has already reared its ugly head with Microsoft Websites that require Internet Explorer for access, others that demand Intel's Pentium III chip, and Apple Computer's insistence on Mac OS 9 support for its new iTools venture. These examples represent relatively minor "gated communities" in cyberspace at present, but will AOL Time for instance, continue to offer Microsoft's MSM.com subscribers, or for that matter Apple's Earthlink subscribers, full, unfettered access to AOL Time Internet content?

Unfortunately, people by and large tend to gravitate toward big and successful, even if b&s (or plain bs) also often means mediocre. Microsoft's Windows operating system is an obvious example here.

As Apple iCEO Steven Jobs once observed: "You think it's a conspiracy by the networks to put bad shows on TV. But the shows are bad because that's what people want. It's not like Windows users don't have any power; I think they are happy with Windows, and that's an incredibly depressing thoughtÉ"

So is the thought of such a comprehensive bloc of media content being pasteurized and homogenized to fit the perspective of one big corporation, however much its managers want "to change the world."

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