AOL-Time Warner Merger: Happily Ever After?

For consumers, the combination represents, in its barest terms, the potential for getting whatever they want--books, movies, magazines, music--whenever they want it, whatever way they choose, whether on a TV, a PC, a cell phone or any of the myriad wireless devices that are hurtling toward the marketplace. They can even get it on--drum roll--paper. Is there a compelling reason that one company has to provide all of this? No. It will be up to AOL Time Warner to prove its case to consumers.

That's the tantalizing potential of the AOL-Time Warner merger, the notion that two very different companies can combine to create something unimaginable only yesterday. Ten years ago, a Time Warner manager went to one of the company's senior executives with a proposition. This small but promising online business on whose board he sat, run by this terrific guy Steve Case, was in desperate need of cash. For $5 million, Time Warner could own 11% of it. "If we did that," the boss replied, meaning if he conceded that the digital distribution of content was going to succeed, "then everything we have done here since 1923 could be thrown out the window."

To see that, he may have been a wise man, though a horrible stock picker (that $5 million would be worth $15.6 billion at Friday's market close). But that was then, and this is tomorrow.

--With reporting by Maryanne Murray Buechner, Adam Cohen and Emily Mitchell/New York, Michael Krantz/San Francisco and Chris Taylor/Dulles