The merger signified more than the marriage of two of America’s most respected newspapers. The $1.1 billion, or $15-a-share, price-to be paid in cash and stock -was the highest ever for an American newspaper. And the agreement marked yet another instance of a family-owned newspaper’s being gobbled up by large outsiders. Still, William O. Taylor, chairman of the Globe’s parent, Affiliated Publications, called it “a strong strategic and cultural fit,” while Times chairman Arthur Ochs Sulzberger dubbed it a “once-in-a-lifetime opportunity.”

The benefits to the Globe and Taylor are clear. After shopping the paper around to media companies ranging from Knight-Ridder to The Washington Post (which owns NEWSWEEK), Affiliated got the premium price it was seeking. (The company was forced to seek a buyer because two trusts that kept the newspaper in the Taylor family’s control were set to expire in 1996 and some family members feared a bidding war.) In addition, the deal allows family members like Taylor and his cousin, recently named Affiliated president Benjamin B. Taylor, to run the paper for at least the next five years.

As for the Times, it got one of the great names in the newspaper business in a near-monopoly market. It also got Affiliated’s 33 percent stake in BPI Communications, which owns trade magazines like Billboard and The Hollywood Reporter. Another bonus: the Globe’s color presses.

But reaction to the deal was mixed; while many industry observers questioned the wisdom of paying more than $1 billion for the New England daily, others said the transaction puts to rest the oft-heard speculation that newspapers are dying. As Ben Bradlee, former editor of The Washington Post, declared at a breakfast in Boston last week: “The New York Times’s $1 billion-plus investment in the printed word is a hell of an answer to that question.”

Wall Street seemed unconvinced, however. After the deal was announced, the price of Times stock fell 11 percent in two days. News of the merger-which had been on and off since January-had some analysts scratching their heads over why the Times would want New England’s largest newspaper. Hampered by a sluggish economy, the Globe’s operating income was $51 million last year, down from a peak of $107 million in 1987. While the Globe played hard to get until the Times offered top dollar, some investment bankers say the newspaper should have fetched no more than $900 million. In fact, Dean Witter analyst James Dougherty believes the Times might do better by diversifying outside the industry, which is threatened by the likes of TV and the specter of interactive classified-ad services. Newspapers may not be obsolete, Dougherty says, but “there’s a long way between not dying and being worth a billion dollars.”

Crown jewel: But the Times may be thinking beyond conventional newspapers. Down the road, the purchase offers the company further entree into the fast-growing area of interactive media. By adding The Boston Globe to its database of media properties (chart), the Times can offer on-line computer services, on which readers can call up stories with a single keystroke. “What [the Times] is creating is the Northeast gorilla of content,” says Wheat, First Securities analyst Kenneth T. Berents.

It may be a while before the Times sees a big payoff from the acquisition, but many analysts think the company has made a bold statement about the future of newspapers. “[The Globe] is the key crown jewel,” says Smith Barney, Harris Upham analyst John Reidy. The question is: will the crown prince of newspapers wear it well?

< b>THE TIMES EMPIRE

The media giant’s holdings range from newspapers to magazines and TV stations.

Newspapers: Revenues, $1.7 billion* Holdings include joint ownership of the International Herald Tribune (with The Washington Post), the Spartanburg Herald-Journal (S.C.), Wilmington Star-News (N.C.), The Tuscaloosa News and 28 other regional newspapers.

Broadcast/Wire Services: $80.5 million Owns five TV stations, including KFSM in Ft. Smith, Ark., WQAD in Moline, Ill., and WNEP in Scranton, Pa.; two New York City radio stations, a wire service, a features syndicate and a fax edition.

Magazines: $386.1 Million The company publishes major periodicals, including Family Circle, McCall’s, Golf Digest, Tennis, Child, Snow Country, Sailing World, Fitness and three golf magazines in Britain.

INCLUDES 1992 REVENUES OF THE BOSTON GLOBE.