Matthew Karnitschnig of the WSJ kicks off the morning with a Twilight Zone piece about how Time Warner may not dump AOL after all, but instead sell off cable and "double down" on the Internet by buying another big net company.
Without commenting on the plausibility of this theory (except to say that it would be quite a change of heart), here are some thoughts:
- Oh, the irony! The theory behind the strategy, apparently, is that cable will become increasingly commoditized and less relevant in a world with the Internet and Internet TV, etc. It was, of course, exactly this sort of thinking that led to the "transformative" AOL-Time Warner merger in the first place. Without concurring that cable will become less relevant (somebody has to plumb the pipes), this would lend credence to the idea that the AOL-Time Warner merger wasn't a colossal, bubble-headed strategic error, but just early.
- The most sensible big-net-company acquisition/merger candidate is MSN. A combined AOL-MSN would dominate online communications, and, together, would have the scale and clout that each company alone currently lacks. The integration, management, and long-term growth strategies, of course, would be a nightmare.
- Assuming Time Warner isn't up for that challenge (and who could blame them), companies like Facebook, Bebo, Music Nation, and others fit into the company's entertainment DNA and would help offset/refresh the demographics of AOL's geriatric user base. They also wouldn't require another bet-the-company roll of the dice.
AOL's having a 'meet the new AOL' event today, so maybe we'll get further details.
A reader suggests another sensible Time Warner acqusition candidate: Joost. Any others? (I personally think Joost would make sense but also be extremely risky, because 1) the site hasn't even launched yet, and 2) if/when Joost is owned by one of the big media companies, it will lose its status as a neutral "Switzerland" BigMedia solution.)