NEW YORK -- America Online's record US$164 billion takeover of media giant Time Warner throws the media and phone businesses wide open for other mega-mergers, analysts said Monday.
They said the deal could help wipe out the last barriers among phone companies, old-line media, and entertainment conglomerates with their rich mix of movies, magazines, and cable TV, and fast-growing Web companies such as AOL, the world's No. 1 Internet access firm.
"Any company is fair game. There is nothing that is sacred here anymore," said Larry Rice, chief investment officer at Josephthal Lyon & Ross.
Jeffrey Kagan, an independent telecommunications analyst in Atlanta, said the merger would speed the day when consumers could get phone service, entertainment, news, and information from a single source.
"Everything is being rewritten from a sub-atomic level," he said.
America Online (AOL) said Monday it would buy Time Warner, the world's biggest media company, for about $164 billion in stock in the biggest merger ever.
Shares in Time Warner, whose holdings range from Time and People magazines to the Warner Brothers movie studio and the No. 2 US cable TV system, were up 28 1/8 at 92 7/8 in active trade on the New York Stock Exchange. AOL, the most actively traded Big Board stock, was unchanged at 72 7/8.
"If you look at the market today, everybody is in play," said Dennis McAlpine, an analyst with Ryan Beck and Co. "They are not taking any prisoners today."
The AOL-Time Warner deal dwarfs previous deals in a wave of mergers that has swept the media business in recent years.
US mergers in the sector hit an aggregate of $235 billion last year, up from $131 billion the year before, according to research firm Thomson Financial Securities Data in Newark, New Jersey.
Shares in media and Internet companies shot higher as Wall Street bet on which properties could be the next takeover targets.
Among companies seen as likely targets, Walt Disney (DIS) was up 3-14/16 at 35-1/16 and No. 3 cable service provider Comcast (CMCSK) rose 4-1/8 to 46-1/2.
Broadcaster CBS (CBS) rose 3 1/16 to 61 1/16 and cable TV company Adelphia Communications (ADLAC) was up 3 2/16 at 68 3/16.
Liberty Media, the cable TV arm of phone company AT&T (T) surged 6 to 55 13/16 after approaching its year-high mark. AT&T itself was up 2 6/16 at 51 3/16 amid optimism about AT&T's talks with Time Warner about providing phone service over Time Warner cable TV lines.
An agreement over phone service "should also take [the] steam out" of cable companies' fight with AT&T over access to the phone company's high-speed Internet lines, wrote Sanford C. Bernstein analyst Tod Jacobs.
The Dow Jones Internet index up nearly 6 percent. Yahoo (YHOO), a Web media company, was up 36-3/4 at 444 and ExciteAtHome, controlled by AT&T, was up 1-13/16 at 40-3/4.
