AOL, eight years after the Internet service linked up with Time Warner Inc. in a $124 billion merger, is now worth half as much as Facebook Inc. and less than 5 percent of Google Inc.
Source: BloombergÃ‚Â News
Keys: Mergers, stock market, marketing
Questions for discussion:
- Stocks are worth what someone is willing to pay for them. But this is based on expected revenues and profits generated by the enterprise. Given this information, explain why AOL is now considered to be worth so much less than when the merger with Time Warner was announced in 2001?
- Can you think of any new ways for AOL to capitalize on its brand name and customer base and create additional revenues?