Lack of synergy

According to an article in the Washington Post, AOL is loosing market share to Road-Runner. The interesting thing is that both companies are owned by AOL-Time-Warner but are not playing together. This represents a huge problem for the company as it is the most visible area of potential synergy between AOL and Time-Warner.

Here’s a crazy thought, why doesn’t the company break it all down into an access division (probably going to Road-Runner) and a content division (probably going to AOL). Using charge-backs, they would trade money back and forth and Road-Runner could keep focusing on access (inheriting a lower speed dial-up system in the process) and focus on converting dial-up users to broadband, while AOL would focus on developing content and tools (the AOL software) that would run on both system.

Obviously Road-Runner has figured out how to sell access and AOL is good at building software that is easy to use for the average computer user. Let AOL get rid of the access layer (the client already does TCP/IP) and focus on improvements to IM, mail, and content and let Road-Runner focus on selling access and you have a pretty powerful combo.

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