Executive Reading: October
From October 2004
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"Fools Rush In"
by Nina Munk
reviewed by Tim GartnerMistakes and misjudgments, and colossal ones at that, are the central themes of this sprightly written book about the disastrous merger of Time Warner and America Online (AOL). It’s a tale of covetousness and conceit run wild, a land-mine avoidance guide for managers of companies of all sizes that may be contemplating merger, acquisition or being acquired.
“Fools Rush In,” by veteran magazine writer Nina Munk, details the problems that compound to sink the media mega-merger announced in January 2000, a move that wiped out nearly $200 billion of shareholder value scant months after the alliance was consummated.
The company still faces federal investigations by the Securities and Exchange Commission and the U.S. Justice Department for its allegedly fraudulent accounting, in addition to 50 shareholder lawsuits.
Ego, greed and carelessness all contributed to the downfall of a oncemighty enterprise, Henry Luce’s Time Inc. Lessons abound here, whether a company operates globally or locally. Munk delineates the lack of cooperation and communication, as well as the indecent hurry (three days!) to get the huge $163 billion transaction completed.
Continued...
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