Week 3 - Thinking about Media change

Has institutional convergence proved to be a right decision for corporations?

The term convergence is the joining together of different things from different directions. In media this means institutions are growing closer together in order to increase profits and domination. A recent example of this was the convergence of AOL and Time-Warner in 2001, this represented the largest media company in the world. Both companies hoped that the convergence would produce an overall benefit for both parties. The merge of one of the worlds highest ranked people companies and one of the world’s largest distributors of online content would prove to be great for increase in profits for both parties however, the merge is known for being the worst in history.

Its argued that there was many reasons for the fail in the merge between the two sides both blaming. One of the biggest reasons could have been that AOL, the champions of dial-up internet, was facing a loosing battle against broadband, as was the new high-speed internet, as more people were upgrading to it. Another reason could have simply been the impact of the merge on the employees. Many mergers fail to think of the impact it has on the employees as very little information is given to them. This was the case in the merge of the two companies which angered a lot of employees. As result it was only natural that there was a lack of communication and ideas as employees became less productive as a sort of psychological protest.

I think that the new technological change brought about a huge problem for the merge as it wasn’t predicted or taken into consideration before or after merge. I think that the new media, broadband internet, was the main reason for the fail in the merge which suggests that institutional convergence can prove to be costly as new media is always progressing and developing. Unless this is taken into consideration institutional convergence may not always be the right decision for corporations.