Tuesday, March 22, 2011

B.A.F.F.L.E.D. Tops

The Top 3 Business Mergers ....Lately

Over the last few months, we've seen some major mergers in the entertainment/news media/communications industries.  Check out the details on these 3 big business mergers, and what they mean for users and consumers.

NBC Joins Comcast
In late 2009, cable giant Comcast announced their joint venture with General Electric's NBC Universal.  After previously joining forces with Universal Studios, NBC was later taken under the G.E. umbrella-- and now Comcast's.  When asked about the big deal, Comcast CEO, Brian L. Roberts said “a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding."  

As it stands, the transaction was not a takeover, but a merge with Comcast owning 51% and G.E. having 49%.  NBC holds a great deal of value in its prized stations, USA, Bravo, SyFy, CNBC, and MSNBC.  Saying the merger would take about 18 months, the Federal Communications Commission approved the transaction in January of this year.  According to the companies, this means greater options for consumers, more local news coverage, high-speed broadband, service opportunities for low-income consumers, and more innovation. 

The deal was worth $30 billion.  Yikes.

AOL Acquires the Huffington Post
The news website which boasts numbers of 25 million visitors per month was recently acquired by a trailblazer in the internet age.  AOL has taken the Huffington Post on under its conglomerate to create an innovative, "next generation media company".

Arianna Huffington, The Huffington Post's co-founder and editor-in-chief, was named president and editor-in-chief of The Huffington Post Media Group.  The Group includes all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, among others.  This union is not only one of news and lifestyle guidance, but technology and social networking as well.  With AOL recently launching Patch.com, the merger seeks to give consumers "more"....more local news, more video content, more financial advise, more options.

Both this merger and the NBC/Comcast deal appear a bit scary to antitrust and anti-monopoly types.  But, with the options we have in social media, and the ease for creating one's own space, maybe this is not as bad in 2011 as it may have been in years or to generations past.  AOL paid $315 million for the 6-year old Post. 

AT&T Purchases T-Mobile
Just Sunday, the mobile giant announced it would be purchasing customer care favorite, T-Mobile for $39 billion.  T-Mobile is currently owned by a German telecom  provider, Deutsche Telekom.  Both T-Mobile and AT&T are based on GSM chip technology and the acquisition reduces the number of mobile providers offering the service to just 1 in the U.S.  The deal also reduces the number of providers in America, period.  Just a couple years ago, Verizon bought Alltel, and shortly before then, Sprint acquired Nextel.  With this new deal, we are down to a Big 3.  

So what does this mean, other than the iPhone staging to take over the world?  Well, first the merger has to be approved by the FCC.  The whole deal should take about one year or more to complete, giving customers the chance to prepare themselves for changes.  Although T-Mobile, like Sprint, has been struggling lately to compete with AT&T and Verizon, many are skeptical about the deal.  T-Mobile actually has a better network, and this deal is priceless for AT&T improving their service.  The fear is higher prices, fewer consumer choices, and potentially less innovation as a result of the lack of competition.

What all of these mergers bring is the question of competition, monopolies, and even antitrust issues in our markets.  The Sherman Antitrust Act provides strong federal regulations about reducing competition, but with these major changes of late, we have to wonder about the competition in the market of the future.
B.A.F.F.L.E.D. will miss you, T-Mobile.

Well, change is the only constant!



  1. nbc joining comcast could cause concern especially if you consider that a content deliverer has just become a content creator. net neutrality is probably the biggest issue with this merger. who's to say that comcast, at some point in the future, won't give speed preferences to their own content? as it's already happened, we can only hope for the best.

    regarding at&t-mobile, i think it's a shame because it will stifle innovation (imho). prime example is android. t-mobile was the first to carry an android phone and to this day is the only carrier who will subsidize a completely open android phone (nexus one & nexus s) without adding bloatware.

  2. Thanks GuyverV! Great insight.


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