Extra Practice News Story # 7 Business

PALO ALTO, Calif. – In an unexpected move by what some have called the most important search engine for the last 5 years, Google INC. (GOOG) has made a bid for Time Warner INC (TWX). The initial purchase price is $50 billion with $35 billion in stocks, $5 billion in cash, and $5 billion of their debt paid off. Time Warner CEO Richard D. Parsons said, “I couldn’t even speculate the value.” When asked about the company’s opinion on taking the offer Parsons admitted that it was a worthwhile offer and that the company had already begun internal discussions. 

This turmoil in Silicon Valley has caused some discussions on whether this merger would disrupt the balance of competition within their markets. Chairman of the FCC Michael Powell would only state “We’re not in the business of looking into hypothetical mergers.” Until Time Warner has makes a decision, Google CEO Eric Schmidt is staying hopeful, “to merge that user base would be beneficial to the user and consumer.” These two companies, if merged, would include such media giants as AOL, New Line Cinema, and HBO. In the future, google could potentially become the most successful media giant in history.