Shares of both America Online (NYSE: AOL) and Time Warner (NYSE: TWX) were strong in early trading today after the companies announced that they will merge in the biggest takeover deal ever. AOL will buy Time Warner for about $350 billion in stock.
The news sent Time Warner stock rocketing nearly 44 percent in early trading, with shares climbing 28-1/4 to 93. Shares of AOL climbed 3/4 to 74-1/2.
Time Warner’s properties should benefit greatly from a strong online partner, and this deal could erase the memory of Time Warner’s online failure with Pathfinder. Meanwhile, the deal should boost AOL’s efforts with offering high-speed Internet access and increase its awareness among TV and movie audiences. Expect other big technology and media companies to look for a dance partner.