During the 90s‚ AOL was typically the first production to the Internet for most people. AOL was a very simple and easy to use online service that provided high quality service to millions of users. AOL offered a tremendous number of services to their customers at a very reasonable price. Typically‚ you could spend ten minutes or ten hours a day on AOL‚ all for for the same price. People loved the service because all their content was fresh and the sign up was very easy. Today‚ AOL remains one of the
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The Time Warner and AOL merger Hélder Salvador de Albuquerque Master of Science in Finance Project Supervisor: Professor Alberta Di Giuli‚ Assistant Professor‚ ISCTE-IUL Business School‚ Finance Department 29th of April‚ 2011 The Time Warner and AOL merger Abstract The corporate world has experienced Merger movements since the beginning of the XX century when the first wave of Mergers & Acquisitions occurred. These Merger movements always represent intent from companies to take
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Discussion Questions 1. What is the main thrust of the strategy that AOL has been pursuing? In 1999‚ the major problem facing the “AOL Anywhere” strategy was how high-speed‚ broadband technologies would impact the company’s future growth. If AOL were to remain dominant against its competitors‚ it‚ too‚ would have to offer broadband access. Indeed‚ the emergence of broadband was the motivation behind the AOL/Time Warner merger‚ which was announced on January 10‚ 2000. The merged company became
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Financial Accounting and Reporting Case: America Online 1. What accounting approach has AOL used in the past that it is now changing (related to the $385 million)? AOL‚ prior to October 1‚ 1996‚ recorded the expenditure related to subscribers acquisitions as an asset and amortized monthly over a period < 24 months. This was a strongly criticized approach. Furthermore‚ the accounting approach in the article is considered aggressive. In October 1996‚ they discontinued capitalizing customer acquisition
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AOL Case Study 1. What accounting approach has AOL used in the past that it is now changing (related to the $385 million)? Prior to October 1‚ 1996‚ AOL accounted for the cost of direct response advertising as "Deferred Subscriber Acquisition Costs‚" i.e.‚ it recognized (reported) the costs of mailing out diskettes allowing you to sign-on to AOL for 100 free minutes as an asset on its Balance Sheet. In accounting‚ we say that the costs were "capitalized‚" meaning reported on the Balance Sheet
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Using the Accounting Framework: AOL (Chapter 5‚ Antle) • AOL’s business environment America Online was the leader in providing internet connections in 1997 with 8.6 million subscribers. AOL had two sources of revenue (i) online service revenue generated from customer subscription to online service‚ and (ii) other revenues from e-commerce and advertising. Rapid changes occurred in the manner in which subscription revenue was generated which shifted AOL strategy to focusing on increasing
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1. In the AOL / Time Warner transaction‚ which party was the acquirer? It was structured as a MOE (Merger of Equals). However‚ after the transaction‚ the previous AOL shareholders owned 55% of the new company (“New Co”) so the industry analyst commented that AOL acquired Time Warner. However‚ the deal process (due diligence‚ merger agreement‚ and the final negotiation) and the aftermath and the senior management composition suggests that actual buyer seems be Time Warner. 2. What were the three
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Chapter 2 America Online‚ Inc. Teaching Note Introduction The America Online (AOL) case is a comprehensive financial-statement analysis case. It enables students to do strategic analysis‚ accounting analysis‚ financial analysis a: and prospective analysis in a rich context. It can he used either as the first case in a course. on financial; statement analysis to set up the course framework or towards the end of the course as a comprehensive case. If it is used at the beginning‚ the instructor should
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MIS Management Information System Crowdsourcing at AOL Case Analysis 1. A brief analysis of the case study AOL engaged in what is called “micro-tasking”‚ and is believed to revolutionize the virtual workforce. Micro-tasking is what Daniel Maloney‚ an AOL executive‚ applied when he was faced with inventorying a vast video library. He broke the large job into small pieces and utilized a crowdsourcing IT platform‚ Mechanical Turk‚ in order to describe each task that he required to be done. Each
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AOL ASSIGNMENT There were two accounting policies used by AOL that were considered aggressive‚ as well as controversial. The first was to amortize its software development costs and the second was to capitalize subscriber acquisition costs. The lifetime‚ for amortization purposes‚ which AOL assigned to software development costs was five years. This was considered by many to be an exceptionally long time considering the pace at which technology was progressing during that period of time.
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