Happy Birthday, Time Warner. Enjoy It.S

Do you know what today is? It's the 20th anniversary of Time Warner. The massive merger that created the media behemoth happened on March 4, 1989. Time Warner was the future! And now?

Well, it's not "the future" so much as... we wanted to say something more clever than "the past," but in a sense it is "the past." Time Warner is the Platonic ideal of the massive, multi-tentacled, omnipresent media corporation. And in 1989, that sounded like a fabulous idea. Here's what was said at the time:

AP 3/4/89
"There's never been a deal like this in the media business. This is going to be a frighteningly powerful company," said John S. Reidy, an analyst at Drexel Burnham Lambert Inc.

LAT 3/5/89
Some analysts expressed surprise that Warner sought the merger, because they believe its stock value could appreciate more rapidly on its own. But one analyst called the move a "career capper" for the 61-year-old [Steven J.] Ross, who co-founded Warner in 1961.

Ross rose from managing "parking lots . . . and now he is the head of the greatest media company in the world. I mean, give me a break!" said one securities analyst.

And Time Warner was frighteningly powerful!

NYT 3/5/89
The merger would insure Time Warner a place in the 1990's as one of a handful of global media giants able to produce and distribute information in virtually any medium. The companies said the deal would help the United States compete against major European and Asian companies...

An analyst for Drexel Burnham Lambert Inc., John Reidy, called the deal ''mind-boggling.''

''What you've got is a company that will be the largest magazine publisher in the country, the world's most profitable record company, a cable television entity with more than 5.5 million cable subscribers, one of the world's largest book-publishing operations and the country's largest supplier of pay-cable programming,'' he said.

So Time Warner had a pretty good run. The AOL deal was a killer, but in 1989, that was far in the future. The combo that was so "mind-boggling" at the time did its job well for a while. But the internet killed Time Warner in more than just the AOL way. Decentralization. Lowering of barriers to entry to the media. Virtually free and instantaneous publishing. More free content than you could ever see. And the music industry, you know. None of these developments are particularly good for the "behemoth" model. The future is smaller and quicker. As intent as those guys were 20 years ago to assemble Time Warner, they better be equally intent to take it apart today. TWX stock is now about a tenth as valuable as it was a decade ago. And for Time Warner, they'll never see a decade like that last one again.

Happy Birthday, Time Warner. Enjoy It.S