In 2000, AOL Acquired Time Warner in a Deal Valued

question 77

Essay

In 2000, AOL acquired Time Warner in a deal valued at $160 billion, excluding assumed debt. Time Warner isvthe world's largest media and entertainment company, whose major business segments include cable networks, magazine publishing, book publishing and direct marketing, recorded music and music publishing, and film and TV production and broadcasting. AOL viewed itself as the world leader in providing interactive services, Web brands, Internet technologies, and electronic commerce services. Would you classify this business combination as a vertical, horizontal, or conglomerate transaction? Explain your answer.

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Definitions:

Public Schools

Educational institutions funded and administrated by the government, offering free education to students within a certain area.

Standardized Test

A test administered and scored in a consistent, or "standard", manner across different individuals or groups designed to measure various aspects of performance.

Norms

Socially accepted rules or standards of behavior that members of a group are expected to follow.

Heterosis

The phenomenon by which the offspring of two genetically distinct individuals exhibit qualities superior to the parents, commonly referred to as hybrid vigor.