The proposed merger of America Online and Time Warner Corp. marks the passage of the Internet from an exotic technology into a mass media industry.
It means that AOL, the Internet service provider that has 20 million customers, will acquire in Time Warner's cable systems a more expansive and easy-to-use system of distributing news and entertainment material to consumers and homes.
"We will look back on this year as marking the day that the Internet ceased to be a 'technology' and became a mass media industry," said Paul Saffo, director of the Institute for the Future, a Silicon Valley think tank based in Menlo Park, Calif.
What the experts foresaw as they examined the proposed AOL-Time Warner deal is nothing less than the fulfillment of the Internet's promise of interactive entertainment, education, medical diagnosis, retailing and scores of other services to homes and consumers.
The belief of companies and many experts is that millions of consumers--roughly 50% of the U.S. total--who have yet to go online would do so if the Internet were more accessible. For that to happen, though, appliances will have to be different from today's computers. Don't think computers, think televisions, said Frank Gens, senior vice president for Internet research at International Data Corp., a Framingham, Mass., research firm. The AOL merger with Time Warner, a $27-billion-revenue giant of movie, television and print communications, could bring the masses to the Internet. But television will have to be the key.
"You're not going to get the next 50% by throwing CDs at them," Gens said, referring to AOL's strategy of mailing out millions of computer CDs to encourage consumers to sign up for its service. "You've got to get them through the television"--a medium that Time Warner has mastered through its cable systems and channels, such as HBO, CNN and others.
Why should this deal arouse hopes for that kind of change? Because of the consumer and the in-home orientation of AOL, the 15-year old company that last year had $4.8 billion in revenue from subscribers and advertising.
"I don't think AOL is thinking of themselves purely as an Internet company," said James Korris, executive director of USC's Entertainment Technology Center. "I think they are thinking of themselves as a bridge, a conduit between the home and the rest of the world.
"What would probably please them more than anything is to have a completely idiot-proof set-top box that delivers everything you want directly and on demand," Korris added.
