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Updated from 10:39 a.m. ET

Some 11 months after

America Online



Time Warner


announced their merger, Time Warner's stock is right back where it started, and AOL's has done worse.

But now that the companies have


Federal Trade Commission

approval for their big deal, the question is whether next year's track record will be any better.

On Thursday, Time Warner's shares rose $2.86, or 3.9%, to $75.46, up from $64.59 on Jan. 7, the last trading day before its deal to be acquired by AOL was announced. The stock traded as high as $105.50 earlier this year. AOL shares Thursday were up $1.95, or 4%, to $50.40; the shares were at $73.75 before the companies went public with the merger to create AOL Time Warner. Of course, the intervening months have brought a Net stock selloff that has punished AOL's Internet competitors far more drastically.

New Paradigm?
Time Warner, AOL since deal

The skeptics find AOL Time Warner an easy target. On the bright side, says Nick Moore, portfolio manager at

Jurika & Voyles

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, it gives AOL some non-dot-com stability: "The deal adds immeasurably to AOL's ability to survive," he says.

But the track record for big mergers, especially in the history of Time Warner -- which will be contributing most of the merged companies revenues and earnings before interest, taxes, depreciation and amortization -- isn't good, he says. After Time and Warner merged in the late 1980s, "It was dead money for eight years," he says. "This is



, except in the media space." Moore doesn't own either Time Warner or AOL.

Yearning for Juergen?

Tarring AOL Time Warner with DaimlerChrysler's brush may be unfair; the difficulties of merging Detroit and Stuttgart might be a mite harder than bringing together two towns at opposite ends of the Metroliner's run. And


(C) - Get Citigroup Inc. Report

stock, created out of no small merger itself, has done just fine since the Citicorp/Travelers Group deal was completed two years ago.

But even people more optimistic about the merger aren't quite sure how soon everything will gel at the new company.

As far as cost savings go, they're optimistic. "I'm pretty comfortable in AOL's management," says Paul Cook, portfolio manager at

Munder Capital Management

. "They block and tackle really well." AOL is a major holding of Munder's.

But as for revenue synergies -- how to combine AOL's online franchise with Time Warner's broadband cable network and off=line media properties -- now that's a different story. "The question that sticks out," says Ethan McAfee, internet analyst at

T. Rowe Price

, "is how much revenue synergies there are now. That will determine wither they outperform over the next few years." T. Rowe Price holds stock in both Time Warner and AOL.

Linda McCutcheon, CEO of online community company

and former president of

Time Inc. New Media

, violently disagrees with the idea that the two companies wouldn't be up to the task of creating revenue synergies. "The combination is going to be powerful," she says. "These are two of the best direct marketing companies I've ever seen."

The Speed Question

Cook says he's not as optimistic about the speed of those revenue synergies as he was a year ago. Yes, the print properties and the moving video produced by Time Warner will find their way via high-speed lines to the home, but not as quickly as he once thought, because the capital markets aren't as willing as they were a few months ago to fund this broadband deployment across the U.S. "It takes longer for broadband to come to us, as businesses and consumers, and it takes a little longer for the AOL Time Warner story to get realized."

Moore has his own take on the same concept. Though Internet companies like AOL have sought to revolutionize the music business, they might whistle a different tune once Warner Music Group's cash flow becomes part of AOL. Any moves they make that might increase online music sales at the expense of WMG's cash flow might not look as attractive once it's on their financial statements, he says. "We'll see if they're really willing to kill their children," he says.

Says Cook, "The transaction happens a little before people are ready for traditional media and new media to get married," he says.

Although Cook acknowledges that his assessment sounds bearish, he says he's bullish on the stock. However, "You've got to be a buy-and-hold investor, near term," he says.