Chapter 9: Media Meltdown

Overview

The Politics of Piracy

From my last book:

During one frantic week of wheeling and dealing in mid-December 1999, America Online entered into two multimillion dollar pacts ”with Circuit City and Wal-Mart ”one day after Yahoo! entered into a similar pact with Kmart, and Microsoft invested $200 million in Best Buy. A few months later, AOL announced it was acquiring Time Warner. During the previous year, NBC joined forces with Microsoft, Ted Turner rolled CNN into Time Warner, Michael Eisner bought ABC for Mickey Mouse, and Mel Karmazin sold CBS to Sumner Redstone's Viacom. The only remaining question is who will merge with Barry Diller? These media, Internet, and retail titans all formed alliances for a single reason: Fear!

We now know the outcome of that round of merger-mania and fear. Red-stone and Karmazin won't sit in the same room together, AOL Time Warner is $30 billion in debt, Steve Case and Gerald Levin are out of jobs, Michael Eisner is next , and Ted Turner is dumping his AOL stock! In a recent interview, Turner asserted that his personal fortune , once more than $7 billion, has declined 80 percent in value due mainly to the plunge of his AOL Time Warner shares. Turner was the largest single shareholder, with 3.5 percent of all outstanding shares, when AOL began to tank.