Monday, September 19, 2011

Let's split: Netflix isn't the only company splitting up, as Tyco announces a split into three companies

This isn't exactly media news, but it is an interesting follow-up to the Netflix story.

As you should have read by now, Netflix is splitting into two companies: one will stream movies and will be called Netflix, the other will rent you movies and games and will be called Qwikster. The move will test the theory that two companies retaining one customer will be easier than one company retaining two. Or something like that.

Well, the traditional reason a company splits is because the value of the split companies when added together will be greater than the company if kept whole. That surely is the reason behind splitting industrial conglomerate Tyco into three different companies.

The three new companies will be ADT North American Residential, the home security division, Flow Control, the values and controls company, and Commercial Fire and Security, the fire detection systems company.

This splitting idea may have some merit, maybe TNM should split up, as well. TNM could split into two new companies: one that provides news and information about New Media and another than allows me to make a living. It's that second one that may prove a challenge, right?