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

However, the US regulators - the Federal Communications Commission (FCC) - have imposed conditions on the deal, in order to protect smaller internet companies.

As Time Warner develops its broadband cable network, the new company will have to allow competing internet operators to put their own services on the high-speed system.

"This is a historic moment for consumers everywhere, and a tremendous step toward our goal of becoming the world's most respected and valued company," Steve Case, chairman of AOL-Time Warner, said in a statement.

"AOL-Time Warner will lead the convergence of the media, entertainment, communications and Internet industries, and provide wide-ranging, innovative benefits for consumers," he said.

This is a historic moment for consumers everywhere, and a tremendous step toward our goal of becoming the world's most respected and valued company

Steve Case, chairman AOL Time Warner

The FCC conditions were less stringent than rivals like Excite@Home, Microsoft and AT&T had been demanding.

They wanted the regulators to rule that consumers using any service could send short, real-time messages to AOL users - something they are not able to do now.

But changes in access to AOL systems will only take place as new technology comes in.

Rationalisation

Partners: AOL's Steve Case and Time Warner's Gerald Levin shake on it

One of the first results of the merger is likely to be a wave of job cuts at CNN, which is part of the giant Time Warner empire, according to press reports.

CNN's global internet and television interests are expected to be rationalised, with the loss of up to 1,000 jobs at its operations in the US and elsewhere in the world, the reports say.

The AOL-Time Warner merger had already cleared regulators in Europe and US antitrust legislators.

Compatible

The FCC conditions mean that AOL-Time Warner will have to allow consumers to choose their own internet service providers (ISPs) from among those carried on Time Warner's cable lines without pressurising them to subscribe to AOL's own internet service.

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 company will also have to allow the ISPs on the system to choose the content of their opening page and have direct billing with their own customers.

AOL will have to make its next generation of instant messaging services offered via Time-Warner's cable network available to competitors.

However, the system of short text messages, which is already widely used by millions of consumers, will not have to be opened up to rivals.

At the moment, this is merely used as a fast way of sending short notes to other subscribers, but it is expected to rapidly develop into a lucrative platform for sending picture and video files.

Big names

The AOL-Time Warner merger brings together America's largest internet service provider with some of the best-known names in entertainment, including CNN, HBO and Warner Brothers music.

America Online

Headquarters: Dulles, Virginia Founded 1985 Employees: 15,000 2000 revenue: $6.89bn 2000 profit: $1.2bn Market value: $111bn World's largest online service Most popular e-commerce platform 26m AOL members 2.8m CompuServe members 4.4m international members

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

When the deal was first announced, AOL shares were trading at $72.875, valuing the union at almost $164 billion.

But AOL has since lost almost a third of its value, as investors have fled internet stocks.

However, as the deal was clinched AOL shares closed more than 5% up on Thursday at $47.23, while Time-Warner rose over 6% to $71.19.