Summary:

A surprisingly convincing argument by Will Richmond on why Comcast, which hasn’t really done anything big in online content, should be looki…

A surprisingly convincing argument by Will Richmond on why Comcast, which hasn’t really done anything big in online content, should be looking to buy AOL, if indeed AOL is in play. His argument: as companies like Yahoo, AOL and other continue to make strides online with video programming, and as this “cable bypass” activity accelerates, it is extremely threatening to cable’s traditional operating model. With all of these forces at work, it is becoming more urgent for Comcast to do two things: change the dynamics of competition in its favor and open up new growth opportunities for itself.

“Though DirectTV and Echostar are Comcast’s toughest video rivals today, five years from now they’ll be replaced by companies like Yahoo, Google, MSN, AOL and a myriad of others as they bypass MSOs to deliver millions of hours of personalized, high-quality video directly to their audiences….These could all be highly valuable ingredients for Comcast to change its competitive standing and access new revenue opportunities. Again, depending on the acquisition price, I believe a very solid case could be made to justify the deal on both strategic and financial grounds. In fact, I think its logic would be more tightly focused and compelling than the logic Comcast offered to support the failed Disney acquisition.”

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