How does Time Inc buying IPC affect advertisers?(IPC Group Ltd.)

Is everyone a winner after Time Inc's purchase of IPC? What are the pros and cons of the deal for the advertisers?

The trouble with behemoths such as AOL Time Warner is that the larger they get, the hungrier they become. You could make analogies with a shark that has to keep moving forward or die but this beast makes a shark look like a stickleback. Steve Case, the chairman of this corporate giant, has to keep delivering growth or he'll be removed by his shareholders -- and in a mature market such as media and advertising the only opportunities for growth are by acquisition.

This would be fairly straightforward if the company wasn't already so large in its home market that each time it makes a move, the competition authorities start running round having panic attacks. AOL Time Warner has to look abroad. That's why Case stated in a recent interview that, ten years from now, 50 per cent of the group's revenues would come from outside the US. At the moment that figure is around the 20 per cent mark.

At first sight this seems like a wildly aggressive empire-building strategy, but in the bigger picture it's probably more to do with the remorseless logic of his position. Case really has no choice. He has to look at just about every opportunity that comes his way. Especially big consumer magazine companies owned by venture capital outfits desperate to get out of a market that is heading toward the low point in its economic cycle. Companies, in fact, such as IPC -- which AOL Time Warner bought for 1.15 billion [pounds sterling] last week.

So the monster lumbers on, but can we safely ignore most of the background noise -- all the talk about content and synergies and convergence? Or are there real lessons here about how the media world will work in the future?

Michael Pepe, the president and chief executive officer of Time Inc, will now be managing the IPC division. He says: "IPC can help Time Inc in the UK given its size. Consider launching In Style within our smaller local publishing operation versus doing it with the talent, resources and infrastructure of IPC. The same resources can be made available to Time, Fortune or Wallpaper."

He adds: "Time Inc, an experienced direct marketer of magazines, can help IPC generate more subscriptions. IPC can teach us about the newsstand business. AOL can help IPC strengthen its websites, providing tech support like hosting and generating traffic more efficiently. IPC and AOL can also cross promote each other's brands, generating higher sales for each."