I’ve been in the workforce a long time, and one of my basic “rules” is that whenever I hear someone trying to make a case for a merger or deal predicated on all the wonderful “synergies” it will bring, well, that just tells me to run and get as far away from it as quickly as possible.

Sound extreme? Maybe, but in my experience, deals that are predicated on the great synergies they bring are almost always doomed to fail. That’s because the benefits of the synergies are wildly exaggerated and overstated (especially the so-called cost savings) in order to sell the deal, then grossly under-realized later after the dust from the actual merger has settled.

Here’s an example of what I’m talking about: the just-unwound merger between Time Warner and AOL. Not only was it terrible financially— “valued at $166 billion when the self-styled ‘deal of the century’ between America Online and Time Warner was announced on January 10, 2000, an AOL-containing Time Warner today commands a market capitalization of $28 billion … an 83 percent loss in market value,” according to TheDeal.com—but it was also a horrible cultural fit, bringing together an overhyped and overvalued new-media company with a solid and sober old-media giant.

How did it work out? Well, the overhyped new-media company tried to cram its culture and coolness down the throat of the stodgy old-media giant, and the results were predictably bad.

“Although the partnership between Time Warner and AOL was once pitched as a way to advantageously meld old media with new,” The Washington Post notes, “the deal has been regarded in recent years as one of the largest blunders in corporate history. None of the supposed synergies of the expensive union between the two ever paid off, and in recent years AOL’s flagging fortunes have increasingly cut into its parent company’s profit.”

Time Warner brought a ton of great brands to this deal—Warner Bros. Entertainment (including Warner Bros. Pictures), Turner Broadcasting (which includes CNN, TBS, TNT and Turner Classic Movies), HBO and magazine publisher Time Inc. (Time, People, Fortune, In Style, and Sports Illustrated magazines).

American Online brought its Internet service provider business that claimed as many as 34 million subscribers at its peak, according to PC World, “but it lacked the infrastructure and management savvy to transition from dial up to broadband, and its ISP business remained stuck in the ’90s. … While AOL remains a major Internet service provider with about 6.3 million subscribers, it has been letting that business waste away for years. … Today it’s [primary] income source is its declining online advertising generated by its eclectic mix of content sites, including the AOL.com portal, gossip site TMZ.com, and MapQuest. There’s a business model there, certainly, but AOL is small potatoes compared to competitors Google, Yahoo and Microsoft—not the Internet behemoth Time Warner wants it to be.”

In fact, the cool new-media company ended up being a gigantic albatross around the neck of Time Warner, pulling down the value of the combined company. And those great synergies that everyone touted when the merger was announced back in January 2000? Well, they ended up being as overhyped as AOL’s pre-merger stock price.

The New York Times points out: “The [Time Warner-AOL] merger was fed by heady ideas that did not quite pan out—that big online audiences would necessarily yield big profits, and that there were profound synergies to be had by owning different media.”

Synergies in business always sound great, but they should simply be regarded as a nice bonus if they actually work out and not the main reason for making the deal in the first place. In other words, the concept of synergy is more myth than anything else. In fact, if you are basing your deal on the synergies you’ll see, well, my guess is that you don’t have much of a deal to begin with. Just ask Time Warner.

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