Telecom Merger May Spark Similar Deals

Knoxville — The recent announcement of a merger between America Online Inc. and Time-Warner Inc. will join two giants in the telecommunications industry.

A broadcasting professor at the University of Tennessee said the deal makes sense for both sides.

“With AOL buying Time-Warner, it gets one of the largest cable television systems in the country,” Dr. Herb Howard said. “Time-Warner gets to connect with AOL’s 20 million subscribers.”

The AOL-Time-Warner deal may spark other mergers, according to Howard.

“There’s speculation that Viacom, which will shortly include CBS, might be a target for Lycos or Yahoo.”

Howard said the merger may also put pressure on AT&T, which has heavily invested in cable television outlets.