The stock market certainly reflected that view, as entertainment and media companies large and small saw their stocks soar.
USA Networks, TV Guide, AT&T Corp.'s Liberty Media Group, Viacom, CBS and News Corp. all experienced share pops in early trading Monday, due in part to the thought that the latest media merger will prompt other marriages of established media firms and Internet wunderkinds.
Until Monday, the drive to get online was moving along just fine.
CBS and NBC have each taken stakes in a wide variety of Internet ventures, from business-news Web sites to e-commerce operations. NBC has even managed to spin off its online hodgepodge into a publicly traded company, NBC Internet. CBS has been rumored to be considering the same, and even named a new executive recently to head its online operations.
As Time Warner and AOL prepare to create an entity with a projected US$30 billion in
revenue, the aforementioned media properties will probably be watching closely,
BIA's O'Brien said.
If Time Warner and AOL manage to jump regulatory
hurdles, he added, "this could be just the tip of the iceberg" as media companies
and Internet firms seek to speed up their attempts.
Radical move
Obviously, the proposed merger "will step up activity," said Jim Penhume, a media
analyst with Boston's Yankee Group. But others may not see a large-scale merger
with an industry outsider as the way to compete.
"I don't know that everybody would see that the way to do that is essentially selling
your company to a much smaller, much more specialized firm" while reworking a
time-honored brand into an online creation, Penhume said.
Part of Time Warner's thinking may stem from its relative failings on the online
front. Analysts still point to the company's Pathfinder initiative as one of the
Internet decade's more notable losers.
News Corp. and Disney, Penhume said,
haven't done much to shake similar marketplace perceptions of their Net initiatives.
No need for panic?
Bertelsmann AG, the privately held
German media-and-entertainment conglomerate, has already indicated that the
proposed Time Warner-AOL merger poses no immediate threat to its businesses.
Certainly, the proposed deal "will ratchet up the degree of pressure" on the media
and entertainment concerns to come up with a large-scale Internet strategy,
Penhume said, "but I think they are also going to recognize that there are some
risks in going as far as a deal like this."
Not everyone believes the media world needs to make as radical a move as Time
Warner has.
Still, not everyone is running for cover.
