Here comes the Big Brother of info age

WASHINGTON, JANUARY 10: Imagine a single worldwide flying company called The Airline. A universal finance company called The Bank. Or a mo...

WASHINGTON, JANUARY 10: Imagine a single worldwide flying company called The Airline. A universal finance company called The Bank. Or a monolithic energy conglomerate called The Utility.

Continuing the merger mania that characterised the final years of the last millennium, Time Warner and America Online, two of the worlds biggest and best-known communications companies, announced a groundbreaking merger on Monday that some fear will create The Media. AOL Time Warner, as the new conglomerate will be called, will have a combined worth of $ 350 billion with a finger in every media pie a variety of print; cable, television and movies; and the rapidly-evolving Internet.

Media and business analysts say that together the two companies represent an humongous powerhouse with far-reaching implications for content distribution in the age of information.

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The consolidation is in line with the recent trend of mega-mergers of companies in various industries including oil (Exxon-Mobil) and banking (Bank ofAmerica-Nations Bank) that has created giant corporations often worth more than the economy of sizeable countries. AOL alone has a market cap of $ 163 billion, more than twice the GDP of say Pakistan.

Some critics say the new company may well be called AOL Compuserve Netscape Time CNN Warner. In the media field itself, both companies have merged and submerged before. Warner swallowed CNN and took up Time to become Time Warner with a stake in the movies (Warner), television (CNN), cable (HBO), and print (Time and Sports Illustrated). AOL merged with Netscape and swallowed Compuserve and a host of other midgets to become the worlds number one Internet service.

AOL has nearly 20 million subscribers in the United States alone. Time Warner has 13 million cable subscribers. Together, they have a platform that gives them access to the every aspect of the media.

Depending on rapidly evolving technology, Time Warner could conceivably access to AOLs 20 million subscribers to distribute not just the printed word,but also moving images. Similar development in technology could help AOL expand the Internet through television and cable.

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AOL, Time Warner mergeÃ?Under the merger agreement, AOL will exchange 1.5 shares of its share for each share in Time Warner. This would give AOL shareholders 55 per cent of the expanded company. AOLs founder chairman Steve Case will be the Chairman of the new company and Time Warner boss Gerald Levin will be the Chief Executive.

CNNs Ted Turner, who controls 9 per cent of Time Warner stock, will continue to be vice-chairman in the new company. Wall Streeters say this is also the biggest example of the recent trend towards clicks and mortar companies, where growing Internet enterprises are combining with traditional bricks and mortar firms, with the latter too looking for online presence.

Riding on news of the merger, the tech-laden Nasdaq index roared up by 134 within half hour of open on Monday. There are now expectations that other alliances could take shape involving giants likeMicrosoft, Disney, AT&T and Yahoo. Some analysts feel Microsoft, which has media presence through NBC and Slate, will be forced to respond more aggressively. If Microsoft really want to be a player in the media space, they are going to have to respond.

This deal just pushes AOL-Time Warner into the stratosphere ahead of them, one analyst was quoted as saying.