How do you pronounce that?

November 23rd, 2009 - Posted by Admin

When AOL bought Time-Warner in 2000, there were many people suggesting that the $163 billion value company would become a monopoly. Now, nine years later, it is a laughable concept. AOL is separating itself from Time-Warner to again become an independent company, now worth only $3 billion or so.

On December 10th, the company intends to change it’s moniker–but not radically so. The change will be from “AOL” to “Aol”. No one knows if you’re supposed to say it the same, or pronounce it as a word, but the company says it’s a clean break from the past while respecting their history.

But it isn’t all good news for employees at AOL/Aol. They recently announced that they will be cutting some 2,500 additional jobs. They hope to save some $300 million annually by cutting salaried employees before they again separate from Time-Warner. It is not surprising that AOL is trying to save money via cost cutting despite a stronger-than-expected quarter. During a recession is the perfect time to cut salaries precipitously because it is wholly expected, whereas it comes as a surprise in a normal market. This is a sign, though, that the media industry isn’t done cutting jobs.

Malone Resigns DirecTV

April 7th, 2010 - Posted by Admin

John Malone is the Chairman of the Board of Directors at DirecTV. He’s lowering his stake in the company and resigning as chairman because of regulatory issues. The issue is very contrived, but is based on the idea that Malone may have something approaching a monopoly on television in Puerto Rico.

Reducing his votes will help Malone, who is also chairman of Liberty Media LLC, respond to concerns that he has too much power in Puerto Rico, where both Liberty and DirecTV operate TV businesses. The U.S. Federal Communications Commission had called on Malone to sever the Puerto Rico connections after Liberty bought an interest in DirecTV from News Corp. in 2008.

“This is more of a ‘dot the i’s and cross the t’s’ sort of transaction,” said Todd Mitchell, an analyst with Kaufman Bros. LP in New York. “Malone owned controlling votes in both DirecTV and Liberty, and that created an antitrust issue in Puerto Rico. I don’t think it’s that material from an investor standpoint.”

It does seem a tad unfair, though, doesn’t it? That a successful businessman like Malone has to step down from chairing an international company like DirecTV because of an anti-trust issue on a tiny island like Puerto Rico?

Terrorism and Business

December 26th, 2009 - Posted by Admin

Airlines are a major business, as anyone who has ever paid for a ticket knows. That is especially true during the holiday season, when air traffic skyrockets (no pun intended). However, passengers should be expecting extra delays right now after an attempted terrorist attack was foiled on Christmas Day. Increased security in every airport will, then, delay flights, passengers, and profits.

AMR Corp.’s American Airlines and and UAL Corp.’s United Airlines, the Nos. 2 and 3 U.S. airlines by traffic, respectively, said ramped-up security measures were contributing to delays of anywhere from 20 minutes to four hours on cross-border flights because of heightened security. Air Canada, a large Canadian airline, reported “significant delays” on U.S.-bound flights.

This will not likely effect overall business in the industry, but it will have a slightly negative effect on the economy, I’m sure.