Time Warner

Headquarters: New York Formed in 1990 Employees: 69,000 1999 revenue: $27.3bn Market Value: $96bn TV services in 15 countries and seven languages, including CNN Largest premium TV network, HBO (35m US subscribers) Film studios Warner Bros. Second largest US cable system (13m subscribers) 120m magazine readers 320,000 high-speed Internet subscribers

The two companies managed to soothe the FTC's fears, but they still have to secure approval from the Federal Communications Commission, having been given the green light from regulators in Europe earlier this year.

The merger could now be completed at the end of this year or early next year.

Many observers believe the FTC decision could set a precedent for how regulators will oversee the development of new internet services.

"In the broad sense, our concern was that the merger of these two powerful companies would deny to competitors access to this amazing new broadband technology," Robert Pitofsky, chairman of the FTC, said. "This order is intended to ensure that this new medium, characterised by openness, diversity and freedom, will not be closed down as a result of this merger."

The companies have called the agreement "a win for consumers" .

AOL Milestones

1992: floats on stock market 1994: 1m subscribers 1996: launches in Europe 1997: 10m subscribers 1998: acquires Compuserve and Netscape 1999: 20m subscribers 2000: merges with Time Warner

The "commitment to consumer choice embodied in the FTC agreement will become a model for other cable systems throughout the country," they said in a joint statement.

AOL is America's largest internet service provider with 26 million subscribers.

Time Warner is a long established media giant which runs some of the best-known names in entertainment, including CNN, HBO and movies and music from Warner Brothers.

Since it was first announced, the deal has lost almost a third of its value because AOL's share price has fallen 50% as investors have fled internet stocks.

Shares in Time Warner rose $1.90 or 2.6% to $74.50 while shares in AOL closed 3% or $1.55 higher at $50.

Cable dominance

Competitors and regulators had feared that together, the two companies might be able to shut out competitors as new faster cable-based internet services are rolled out.

Time Warner has an extensive network of cable lines, capable of serving about 21 million homes, and through which the next wave of web access is expected to be piped.

America Online

Headquarters: Dulles, Virginia Founded 1985 Employees: 15,000 2000 revenue: $6.89bn 2000 profit: $1.2bn Market value: $113bn World's largest online service Most popular e-commerce platform 24m AOL members 2.8m CompuServe members 4.4m international members

In response to some of the regulator's concerns the two companies have agreed to conditions aimed at preventing them from dominating the developing online world.

Under the settlement, the combined business cannot discriminate in providing Time Warner content to internet companies besides AOL.

The merged company also cannot discriminate against content from other sources that it uses on its internet systems or interactive television service.

The companies have given assurances that consumers would have a choice of online providers, not just AOL, on Time Warner's cable internet systems

To back up that offer, Time Warner forged an agreement to offer AOL's chief rival, EarthLink, a deal which regulators have been studying to see if prices and terms are fair.

The agency wants a blueprint in place so other internet providers, such as Microsoft's MSN service, could reach similar agreements with Time Warner.