• by John Gaffney , August 12, 2002

Can cross-media synergy work? The hottest debate topic of the year stands in the shadow of AOL/Time Warner -- the largest and arguably most ineffective corporate mergers in American media history. However, a new report from Gartner says the concept can still work.

“Set integrative goals in realistic time frames at reasonable valuations; execute diligently to demonstrate value,” states Gartner G2 analyst Laura Behrens. “There’s nothing to stop you from dreaming big — just don’t expect the dream to effortlessly materialize overnight. Honestly assess the operating realities of merging businesses, and the technical and cultural challenges to their smooth integration. Maintain healthy day-to-day fundamentals to keep all constituencies on board through the longer-term process.”

Behrens says most of the big media deals – AOL/Time Warner and Vivendi/Universal included – have not been given enough time to work.

She believes the success or failure of these and other media companies will come in response to two factors. The first is the cloudy vision around digital media. “Although it is facile to think that all text, movies and music will soon be reduced to bits and bytes that flow seamlessly via Internet protocol, it is impossible to understate the impact of that notion,” she says.

The second is concentration of ownership. A few companies, Viacom and Newscorp among them, have integrated various media properties successfully. Behrens urges media owners to pursue the vision of cross media integration chiefly by enabling further digital transition in TV and publishing. She also urges a focus on specific business units before growing any cross-media initiatives.

“Grow by expanding solutions across the famously fractured media environment,” Behrens says. “Success depends on getting in the door with a well-targeted solution to a particular problem, and then translating that solution across both technical and business silos.”