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WSJ on Time Warner: Synergy on the Outs June 2, 2006

Posted by David Card in Media.

Synergy? What synergy? The Journal’s Page One story on Time Warner’s alleged abandoning of a synergy strategy tells old tales, yet seems to contradict itself. The theme is that Time Warner is giving up on integrating properties across media. The reality is, it never tried.

    A few years ago, when Time Warner was espousing the mantra of “corporate synergy,” the two sides might have been forced into cooperating for the good of the company. This time around, Time Warner President Jeffrey Bewkes told the magazine to look elsewhere for partners. “No division should subsidize another,” Mr. Bewkes says in an interview.

Forced into cooperating? If only! A few paragraphs later, we hear — correctly — that

    Time Warner’s new approach follows 15 years of conflict, dating back to the very founding of the company from the 1990 merger of Time Inc. with Warner Communications.

Time Warner has never been a “prominent practitioner of corporate synergy” as apparently history-blind reporter Matthew Karnitschnig claims. Rather, its most senior managers have been prominent proponents of synergy benefits the company rarely delivered. Time Warner’s current situation is a failure not of strategy, but of execution.

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