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Wednesday, 12 January, 2000, 19:21 GMT
Free speech advocates criticise AOL merger

Critics say Steve Case and Gerald Levin are creating a monster

After the euphoria over the AOL - Time Warner mega merger, reality is setting in.

The price of both companies' shares has dropped again as investors cashed in profits following the massive gains achieved on Monday.

AOL/Time Warner Special Report
And while most commentators agree that the two companies are a perfect fit, AOL shares are nonetheless a touch out of favour.

The reason: The firm is not a pure high-growth internet play anymore.

"You've got a new company that's going to grow at a lot slower pace than AOL was growing before", said Mike Wallace, analyst with Warburg Dillon Read.

Back to 1984?

If you look at it from the perspective of Orwell, it's scary
Gary Klatsky
But there are concerns that are much more fundamental than whether the merger will deliver shareholder value.

Seasoned media watchers predict that this merger will not be the last link-up between an old media conglomerate and a high-tech internet company.

They fear that the internet is slowly becoming dominated by a few media giants. This could lead to an Orwellian society where consumers are spoon-fed homogenised news and their every click on the web is monitored and analysed.

Will all news on the web soon become indistinct?
Tom Rosenstiel, director of the Project for Excellence in Journalism, warns: "What this merger invites is the possibility of a new era in American communications that sees the end of an independent press".

It would be ironic if he was right. After all, the internet was always billed as the medium that would break up the power of the media giants and enable everybody to become a publisher.

People like Matt Drudge, the man first to publish the Clinton-Lewinsky scandal, proved the point.

The web is shrinking

This clearly and profoundly deepens the megamedia threat, the concentration of all media in a few corporate hands
Dean Alger
Author of MegaMedia
But even as the number of web sites is proliferating, the web is shrinking, at least in the eyes of the consumers. The top 100 web sites attract nearly half of all page views.

In fact, web surfers now spend almost 20% of their online time visiting only the top 10 sites.

As media and internet companies converge and "web portals" become ever more comprehensive, the majority of internet users may soon deal with four or five content providers.

Companies like AOL or Yahoo! do not write the news.

This is not just about big business ... This is about making a better world for people
Gerald Levin
Chairman designate, AOL Time Warner
But should they be tied up in commercial interests, there would be a big temptation to direct users only to certain content providers - or screen out news they dislike.

Gerald Levin, designated chairman of AOL Time Warner, dismisses such concerns.

Presenting the merger deal he said: "This is not just about big business. This is not just about money. This is about making a better world for people."

And Time Warner's communications director, Scott Miller, chimes in: "The internet is the first limitless medium, and by its very nature, no single company or group can hope to control it."


Gary Klatsky, who teaches a course on the 'human-computer interface' at Oswego State University in New York, is somewhat ambivalent.

Gerald Levin will be in charge of a US media giant with global ambitions
"If you look at it from the perspective of Orwell, it's scary", he says.

But he is quick to add that "from the other perspective ... it will make life easier".

So does the AOL merger herald the advent of the "MegaMedia", giant corporation dominating media, distorting competition and endangering democracy, as author Dean Alger warns?

Both the Consumers Union and Consumers Federation of America worry that the concentration of media and internet power will "hurt the public".

The International Federation of Journalists has similar concerns, raising the spectre of a threat to democratic values and freedom of speech.

However, even though web portals limit choice by their very nature, every browser has bookmarks or lists of favourites that allow users to create their own shortcuts to the news that they want.

And on the global web, an alternative opinion or content provider is only a few clicks away.

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See also:
10 Jan 00 |  Business
AOL and Time Warner to merge
10 Jan 00 |  Business
The first 'clicks-and-mortar' company
10 Jan 00 |  Business
Time Warner: An entertainment blue chip
10 Jan 00 |  Business
Q&A: Merger shakes up the net
10 Jan 00 |  Business
AOL: The internet company that grew up
11 Jan 00 |  Business
Steve Case: Master salesman
11 Jan 00 |  Business
Can the internet save 'old media'?

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