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AOL Time Warner in Stormy Seas

15 July 2002

At the time, the merger of AOL and Time Warner was seen as one of the most celebrated triumphs of the dotcom boom. But now that the fever has subsided, and AOL's turnover from advertising and commerce has shrunk 30% since last year, it is the 'old economy' divisions of Time Warner which are keeping the company afloat. And this is in spite of the sharp decline in advertising revenue over the last eighteen months. Since the share price has plummeted, many executives have seen the value of their share options sink and the company is still servicing a $28 billion debt. It is not clear what effect this corporate instability might have on AOL Time-Warner's publishing division, Time-Warner Publishing, but it does highlight the continuing corporate fallout from the dotcom boom.

Do E-books have a future?

News from the e-book front looks more promising. EbookWeb has grown its traffic to more than half a million page views a month and there appears to be a steadily increasing demand for online digital content. For instance, PerfectBound sold more e-books in the first 5 months of 2002 than in the whole of 2001. And the software is increasing in number too: more than 5 million copies of Microsoft Reader have now been distributed. The growth is not sensational, but it is steady and the signs are that the publishers that continue to develop their online content or their e-book publishing will find a growing market.