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CEO admits biggest mistake in corporate history!
29th September 2010
A cross posting from the Business Studies blog. 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
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.