CEO admits “the biggest mistake in corporate history”

In 2001, internet service provider AOL completed a $164bn (£104bn) takeover of US media giant Time Warner. There were lots of crazy takeovers going on during the dot.com boom (and bust) during that period, but the AOL/Time-Warner deal is often cited as a spectacularly bad one. And now there is an admission that the strategic decision taken by AOL was perhaps the worst in business history.

This article in the Telegraph contains some useful background and describes the admission by Jeff Bewkes, the chairman and chief executive of Time Warner.

The article makes reference to “strengths” (link to SWOT) and to the need for a business to focus on activities where it can genuinely add value.

The New York Times has this excellent retrospective article almost 10 years on about why the merger failed. Essential reading for any A2 business strategy student.