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America Online/Time Warner Merger..
will it impact the real estate industry?
By Daniel Eaton
The recent announcement of the all-stock combination valued at $350 billion merger of America Online and media giant Time Warner is an interesting one. America Online continually surprises me. Here is a company that, at least with my experience, has the poorest products online. My experience with AOL consists of frequent disconnects in the middle of downloading a file, the slowest network response, busy signals, plus a customer support center who's main qualification is how rude can you be. Does this sound familiar? Well then how did AOL get so big to buy Time Warner? Their success is solely derived from their marketing techniques as most of thier content is from outside sources. I must get a free 200 hour AOL disk every two weeks. The early marketing technique was that deal was good for only a month.
It's a numbers game. The more users the better. Imagine if you will the city that you live in. Now imagine it with the population of the entire state. Now imagine if you will, there is only one road in and out of the city that everyone must use. What do you think the value is for the billboards on the side of the road? Did I forget to mention that it's a toll road. Now what's the value if we were to increase the toll a few extra cents? Are you beginning to get the picture? They are in essence the first online portal. AOL continually targets the pre-teen & teenage users. On the other hand, power users such as myself need a service that is more reliable with quicker response. Many power users have signed up with a growing number of Internet service providers for thier online needs.
Overall the merger is a sound one that makes perfect business sense. The most curious thing about the merger is how is it positions AOL in the marketplace. AOL gains access to the Time Warner cable Television network. More potential users with faster connect speeds. Well, maybe. It also open up some interesting possibilities for the entertainment industry. Time Warner realizes that this is one big step for something I predicted several years ago, the convergence of television and computers for a "Smart TV Set". Sony built it with the WebTV, Microsoft bought it, but I feel AOL and Time Warner are positioned to implement it.
So how does this impact the real estate industry. Can you find FSBO's signs (For Sale by Owner) in your neighborhood? Do you see FSBO ads in the classified section of you local newspaper? Can you find FSBO ads or web sites online? You sure can. If you're not careful, you have the potential to loose some market share to the new online media. Most home buyers prefer the ambiguity of buying through a real estate professional. Most home buyers and sellers realize the value of using an experienced agent not only to market thier home, but to negotiate the sale to a successful conclusion. If you are not already marketing yourself, your company, or your listings online, you should. If you are, you need to examine methods to increase your online visibility and your market share. Unless AOL becomes a real estate conglomerate, I don't feel the local agent need to worry. As a matter of fact, they may use the new company as a vehicle to promote themselves on a greater and even more personal scale. However, overall, the consumer may actually loose. Another giant company with less competition and fewer choices for the consumer. What's next? A merger between Microsoft and the new AOL? I am however, looking forward to the time my friend, Elmer Fudd utters, "dah, dah, You have mail."