... first, the economics of the media industry dictate "extracting multiple sources of rents" from any given production, and second, media industry consolidation throughout the 1990s which saw large media firms largely internalize their distribution. However, with the rise of the Internet revolution, Time Warner was feeling pressure on a number of fronts: * A stagnating stock price as markets rewarded nimble, net-centric businesses, no matter how unproven; * Fragmentation of its audience, particularly to Internet media outlets, which it feared would sap it of the scale that provided leverage with advertisers; * Failure in a number of its own Internet ventures, feeding the fear that "old economy" companies truly were ill-equipped to succeed in the emerging "e-conomy;" * Rising costs of talent fueled by the exodus of executives seeking Internet riches. Against this backdrop, Time Warner's agreement to link up with AOL seemed like a solid defensive move, guarding against the potential obsolescence of its ...

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