The AOL-Time Warner Merger

Things were looking bleak for Microsoft until AOL merged with Time Warner. This addition to the AOL-Netscape-Sun alliance created a $350 million competitor to Microsoft. Microsoft cited this as proof that they did have competition and the unavoidable possibilities of entry and swift creation of meaningful competition. The existence of these things made the case a moot point. It also served as evidence of Microsoft's earlier assertion, that the software market is so dynamic that any monopoly is inherently short lived.

One area of competition the two will most certainly be engaging in is the broadband market. This is the emerging market for high-speed internet access via cable and satellite. After AT&T merged with the cable company MediaOne, Microsoft invested $5 billion in AT&T stock, and set up a deal to provide them with 10 million set top internet boxes preloaded with a stripped down version of Windows. In response, AOL made a deal with Direct TV to offer satellite dish based internet access to 7 million customers.

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