ABSTRACT
Media economics may never have been more important for the industry than at the present time. The past several years have been a tumultuous period for media firms. In addition to the financial stresses and volatility faced by firms in general, media firms have been encountering the forces of technological and organizational change as they seek ways to maintain viability in a rapidly changing business and social environment. Perhaps the most prominent example of the challenges manifests itself in the ongoing travails of AOL Time Warner, Inc. Heralded by its proponents in January 2000 as a masterful organizational development to address the challenges of technological change and the financial demands of investors, within 2 years this combination was considered to be a failure from most perspectives. Many of the key players are gone, and further exits and organizational change, some of which may essentially “undo” the combination, will likely continue. Many of the ongoing series of strategic initiatives announced by the firm are greeted with skepticism and investor evaluation of the firm is pessimistic.
