The original article can be read at
I would agree with the things that are discussed here. When we read the article in disjunction with any other case studies, it sounds reasonable. However, I feel, analyzing the things ten years later after the fact is easier than analyzing them before the fact. The actual takeover/merger has happened 10 years back and now a postmortem analysis may make us think that it was a fundamental strategic mistake. Generally there are more factors –like improper execution of the strategy, differences in organizational structure and culture – are in play than the author discussed –like competition, customer development etc. The reason might have been a simple fact that the two corporations were hugely different in their culture that they were unable to work in synergy; or it might have been a real strategic blunder as the author suggested.
These kinds of deals are not new and didn’t stop with AOL and Time Warner. There is a similar deal announced in this very year. I can see similar attempt in Comcast’s acquisition of majority stake of NBC Universal (51% of it). Comcast is a content distributor more like AOL and NBC Universal is the content producer, more like Time Warner. Are we really certain that Comcast is going to bite dust as a result of this acquisition? We never know. They might even be successful with this venture. Had Time Warner/AOL deal been a basic strategic blunder, Comcast would have definitely considered it before bidding for NBC Universal. After all we all learn from the past mistakes so as Comcast.
This comment can be found at http://blogs.hbr.org/martin/2010/11/how-i-knew-aol-time-warner.html#comment-94080351
This book fits better in a biography category than a business
book. I was very much disappointed to learn almost nothing except two things out of it. There is an experience of Tony
in the early days of Zappos
with a company called eLogistics
. Tony discussed all the problems he and Zappos had to go through with that
company. The whole situation emphasizes one of the fundamental strategic blunders to avoid – “Never ever outsource your core competence
“.For Zappos and most, if not all of the e-retailers, warehouse management is one of the core business activities. Zappos did a mistake by outsourcing it to eLogistics and they had to suffer greatly as a result. This is an outright lesson to take from the book.
When it comes to Tony’s personal qualities there is a couple of qualities that impressed me. Those are among those qualities that I want to acquire.
- Tony was an angel investor that supported Zappos in its early days. At the starting it was not in profits and often was on the brink of going out of business. Despite all the problems he committed to the company and hence to his faith. He is so persistent that he put in all the money he was left with after selling LinkExchange. That kind of self-confidence is something worth having a victory like Zappos.
- Whether it is at LinkExchange in Sanjay Madan or at Zappos in Fred Mossler, he was always able to identify talented people and make them work for him (or his company). That’s something a successful leader must be good at. Organizations cannot be built on one person, no matter how smart he/she is. To build a successful company one needs to find right people and make them buy his/her vision. That’s what Tony excelled at.
Those are the two qualities I loved in Tony. Otherwise, he sounded to be a normal person with some natural interest in business. Especially a couple of things wondered me. He pretty much sounded like a normal youngster after gaining around 40 millions out of LinkExchange. He was unable to spend a full year with LinkExchange after it has become part of Microsoft
.He left before the contract of 1 yr ended. That cost him around 8 million. Still he left the company and what he did after that, for the next year or so is pretty much nothing.
He lost interest in LinkExchange even before it got acquired by Microsoft. He was unable to spend more than 2 years at the company that he established himself with his own idea. Exit Strategy is one of the important decisions to be made by any Entrepreneur. He was just good at that. He took the company to 265 million worth, but I won’t see it a success big enough to keep him outstanding. If you ask me whether he could be a role model, my answer would be “No, not at this time”. I recommend this book to those reads fast and won’t spend more than a day or two to finish a 200+ page book.