September 23, 2003
Is It Really Over?... Let's take five with Moira Gunn. This is "Five Minutes".
What could better signify the end of the dot.com roller coaster than the removal of the letters "AOL" from the historic merger of AOL Time Warner? Are the thrills and spills finally over? Are we actually coming back to where we boarded this thing, both relieved and regretful that the ride is over?
Here in San Francisco, the excitement's been over for a while. Gone are the busy cafes, crowded with young people excited about the Internet revolution. Gone are the bragging rights over options earned, or better yet, options negotiated. Gone are the $75 dinners and $90 bottles of wine, all consumed by people in their twenties whose plans for having children could wait until they retired - hopefully, early and rich.
Gone, too, is their sense of being in on the genesis of a new techno-hot global order, which they believed with all their hearts would change the world forever.
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Throughout all this, America Online was never some empty dot.com proposition. From the start, it provided solid new services where none had gone before. It conceived and carried out a truly unprecedented sales scheme, mailing CD's of AOL software, over and over again, to absolutely everybody. And like clockwork, it started taking in monthly revenues automatically from customer's credit cards, changing its pricing packages on a dime to meet the vagaries of the burgeoning Internet marketplace.
Its strategy was simple: Get out in front, and stay there. AOL became the largest Internet service provider in the world, and seemingly, it was unstoppable.
Yet in a classic example of why a falsely elevated stock market hurts everybody, stock buyers not only ran up the price of the most ridiculous and under-developed Internet business propositions, they put even greater weight behind the few Internet businesses which actually made sense. This shot AOL's stock through the roof and kept it there, and it was with this overly-enthusiastic valuation that AOL locked into Time Warner.
While we tend to focus on the stocks that plunged from a $150 to $1.50, it's important to watch the mainstream companies that hitched their wagons to the Internet star. Going into the merger, Time Warner's stock enjoyed no comparable artificial boost, as it was considered one of the "old media" companies. What happened next was like a fledging marriage when the first tax return reveals one of the parties has apparently lost most of its wealth.
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The AOL Time Warner merger was the last, best case of wishful corporate thinking in what will no doubt be called the "Early Internet Era," where the old chased the new, trying to tap into the next wave of fortune.
On its face, the announcement of the name change appeared cold and abrupt. Within days, the letters AOL would be removed from the corporate name, the corporate logo and the gleaming new headquarters building in Manhattan. Even the stock ticker symbol would revert from "AOL" back to Time Warner's old one. But Wall Street can tell you - it's been coming for weeks, and there's no joy in this for anyone.
While the Internet ride is over, the people I miss the most are the kids - their high expectations and unflagging confidence, their energy and their dreams. Wherever they are, they're probably feeling a little depleted about now, especially since the moguls of money have declared them a failure. But I wouldn't worry though: What they don't know yet is that they were successful - they did indeed change the world.
I'm Moira Gunn. This is Five Minutes.
