There Must Be a Pony in Here Somewhere - Kara Swisher

Here is a summary of the prologue:

• The author, Kara Swisher, learned of the AOL Time Warner merger in the early morning of January 10, 2000, after getting a tip from a Wall Street Journal reporter named Peter Gumbel.

• Swisher saw that many top AOL executives were logged in to AOL’s instant messaging system in the middle of the night. When she contacted them, they quickly logged off, signaling they were discussing something important and secret.

• The proposed merger of AOL and Time Warner was an enormous deal that would shock the media and technology industries. Despite AOL’s hot stock price, it was still surprising that the smaller AOL would hold the majority stake and control in the combined company.

• The deal showed how much power and influence the major Internet companies had amassed by 2000, even though many lacked substantial assets. The merger was a symbol of how the Internet was radically transforming media and business.

• In Swisher’s view, AOL lacked assets but had acquired a clueless partner in Time Warner. The deal highlighted the frothy exuberance of the dot-com era.

• In 1995, the author first met Steve Case, the chairman and CEO of AOL. Case envisioned turning AOL into one of the biggest media and communications companies, though this seemed implausible given AOL’s precarious financial situation.

• AOL frequently found itself on the verge of bankruptcy and disaster. To motivate employees during tough times, Jim Kimsey would say “there must be a pony somewhere in this shit,” suggesting there was opportunity in adversity.

• On January 10, 2000, AOL announced it would acquire Time Warner in a stock-for-stock merger. This was a major scoop that required confirmation from multiple sources.

• The author tried contacting AOL executives she knew to confirm the news but they ignored or blocked her messages. This suggested they were hiding something, though it was unclear if it was the Time Warner deal or something else.

• The Wall Street Journal was able to confirm the merger through a Time Warner source. The Journal had actually asked Time Warner about acquisition rumors just the week before, but Time Warner claimed no deal was in the works, unaware their CEO was finalizing it.

• The author had suggested just 10 days earlier that AOL should pursue a major acquisition, even mentioning Time Warner as a possibility, though this was edited out of the published column. The idea of AOL buying Time Warner had seemed implausible.

• Finally, an AOL executive confirmed the deal to the author, gloating “Yes. We bought Time Warner. Unbelievable.”

The key points are: despite facing financial troubles for years, AOL pulled off the surprise acquisition of Time Warner, a much larger company. AOL had long wanted to become a major media company, and this deal propelled them to the top. However, AOL’s handling of the announcement suggested the challenges that would ultimately doom the merger.

• AOL and Time Warner merged in 2000, with AOL acquiring 44% of Time Warner. The deal was initially hailed as visionary but soon collapsed.
• Many now see the deal as one of the worst in history. AOL’s business cratered after the dot-com bust and its stock price plunged. The top executives responsible for the deal were fired.
• Ted Turner, a major Time Warner shareholder, felt “robbed” and ranted about how much money he lost. Though he publicly supported the deal at first, he later called AOL’s CEO a “liar and a cheat.”
• The author set out to investigate what really happened but found most people blamed others and few would speak openly. The truth was hard to determine.
• The author’s first book chronicled AOL’s rise in the early dot-com era. At the time, few understood the Internet’s potential or thought AOL would succeed. But AOL became hugely successful and acquired Time Warner at the height of the dot-com boom.
• The deal was initially seen as visionary but soon collapsed. Now AOL Time Warner is plagued by infighting and lawsuits, and the effort to combine old and new media seems to have failed.
• The author, who wrote about technology for the Wall Street Journal, felt upset in part because the column’s name, “Boom Town,” seemed outdated. The dot-com “boom” had gone “bust.”

The key points are that a once-promising merger deteriorated into a debacle; most of the blame seems misdirected; the truth behind what happened is hard to ascertain; and the failure of old and new media to join forces symbolized the end of the dot-com era’s exuberance and optimism.

• The author believes in the promise of digital technology and convergence of media, despite the failure of the AOL Time Warner merger. She thinks this merger was a pivotal moment that ushered in a new era of maturity for the Internet industry.

• Figuring out who is responsible for the failure of the AOL Time Warner merger is difficult because there are many potential suspects:

• AOL: Perhaps AOL tricked Time Warner into the deal using aggressive accounting.

• Time Warner: Maybe Time Warner was unwilling to change and unable to see the challenges of the digital age.

• Wall Street and venture capitalists: They hyped up internet companies and pushed for the massive AOL Time Warner deal to make money from fees and commissions.

• Investors: They bought into the hype and high promises of the deal but then turned on it quickly.

• The media: The media first praised the deal then damned it without recognizing their inconsistency.

• Regulators: Lax regulation failed to curb dot-com excess and then overreacted.

• The times: Euphoria turned to depression, reflecting the boom-bust business cycle.

• The deal itself: It was too big, promised too much, and collapsed under its own weight.

• The author wants to find the real story of what happened by answering key questions, like who betrayed Ted Turner and whether the dot-com collapse was inevitable.

• Steve Case, AOL’s CEO, took on an aloof manner after the merger was announced, acting like the “King of France.” But for most of his career, Case and AOL were seen as losers and idiots by the media establishment and technology leaders. The hype around the merger briefly made Case seem visionary, but now most people deny any responsibility and blame him.

• AOL has had a bumpy history full of crises, criticisms, and near-death experiences. It was derided for its technology and business model but managed to survive and succeed.

• AOL’s success was largely due to Steve Case, its co-founder and longtime CEO. Case was an unlikely leader and hard to understand. He could be arrogant and aloof but also modest. He frustrated reporters and executives who tried to work with him.

• Case grew up in a privileged family in Hawaii. He and his brother Dan were entrepreneurial from an early age, starting various small businesses. Dan was the more charismatic brother, forcing Steve to distinguish himself. Steve got into the music business, promoting concerts and writing reviews for his high school paper.

• Case went to Williams College, where he continued promoting music events. He was an average student and hated his computer programming class. However, he was fascinated with how interactive technology could change society. In a 1980 essay, he envisioned a future much like the interactive TV services that would launch years later.

• Case applied for a job at HBO’s parent company Time Warner in 1980, foreshadowing AOL’s later merger with Time Warner. However, Case ended up taking a marketing job at Procter & Gamble instead.

The key themes are:

1. AOL and Case overcame immense challenges and skepticism to achieve success.

2. Case was a visionary yet enigmatic leader. He could frustrate others but had a gift for seeing the potential of technology.

3. Case’s entrepreneurial instincts and interest in interactive media were apparent from an early age. His first forays into business and the music industry foreshadowed his future success at AOL.

4. Case’s early ambition to work at Time Warner foreshadowed AOL’s later merger with the media conglomerate, completing a journey that began 20 years earlier.

• Steve Case worked for Procter & Gamble and Pizza Hut before joining Control Video Corporation (CVC) in 1983.

• CVC was founded by Bill Von Meister, an eccentric entrepreneur who came up with many ideas but rarely saw them through. His latest idea was GameLine, a device to download video games over phone lines, but it was a flop.

• CVC was in dire financial straits. Its investors brought in a turnaround expert who dubbed it “Out-of-Control Video.” Von Meister was forced out after making extravagant purchases.

• Steve Case was one of the few employees kept on, largely because he was the lowest paid. Most expected CVC to fail.

• Von Meister continued coming up with new ideas but never had another hit. He died in 1995, nearly broke. Though he founded the company that became AOL, his obituary didn’t even mention it.

• Steve Case credited Von Meister with making AOL possible. But Von Meister’s collaborators said he was always optimistic, even when his ventures failed.

• Jim Kimsey took over CVC and saw little hope for its survival. It had no clear product, market or financial backing. But Steve Case persuaded Kimsey to give the company another chance.

• Kimsey and Case set out to transform CVC into an information and communications service. After many struggles, their vision evolved into AOL. Kimsey became AOL’s chairman and Case its CEO.

• Von Meister watched AOL’s rise but seemed to feel no bitterness toward Case and Kimsey for succeeding where he had failed.

That covers the key highlights from the section on how Steve Case came to join CVC, the company’s dire state after Von Meister’s ouster, how Kimsey took over but nearly shut it down, and how Case convinced him to pivot to what eventually became AOL.

• Jim Kimsey, a West Point graduate and Vietnam veteran, became involved with Control Video Corporation (CVC) to help save it from bankruptcy. However, CVC continued to struggle and its reputation suffered.
• Kimsey and Steve Case decided to phase out CVC and replace it with a new company called Quantum Computer Services in 1985. Their first product was an online service for Commodore called Q-Link.
• Steve Case was eager to form new partnerships and wanted to work with Apple. He spent months convincing them and eventually got a deal to build AppleLink Personal Edition. However, the partnership soured within two years due to differing visions.
• With the end of the Apple partnership, Quantum was again in dire straits. However, they had retained the rights to use the Apple logo for their online service. They sold this right back to Apple for $2.5 million which provided funding to keep the company afloat.
• With the end of AppleLink, Quantum renamed their online service America Online (AOL) in 1989. Steve Case wanted AOL to seem friendly and personal so he added recorded voice greetings and branded members rather than customers.
• By 1990, Steve Case had been essentially running the company for over 5 years. AOL started the decade with around 15,000 members but growth was slow. However, AOL was positioning itself as a leader for interactive services which started attracting interest from bigger media companies.

In summary, after many struggles and close calls with failure, Quantum managed to establish itself as America Online in the late 1980s. Slow but steady growth and a vision for the future of interactive online services helped revive the company and attract potential partnerships. AOL seemed poised to find success in the 1990s.

• Steve Case joined Quantum Computer Services in 1983 when he was in his mid-20s. For several years, he worked his way up in the company. In 1991, when Case was in his early 30s, he was named president of the company. At this point, Quantum had over 100,000 users and had recently signed a deal with IBM.
• In 1991, CompuServe offered to buy Quantum for $50 million. Jim Kimsey, the CEO, wanted to accept the offer. However, Case believed online services could revolutionize communication and did not want to sell. Case and other employees threatened to quit if the company was sold. Kimsey decided not to sell.
• In 1991, the company officially changed its name to America Online (AOL). In 1992, AOL had its initial public offering (IPO), selling shares at $11.50 each. By the end of the first day of trading, AOL employees became millionaires from their stock.
• After the IPO, investor Paul Allen, co-founder of Microsoft, started buying AOL stock aggressively with the goal of gaining influence over the company. AOL implemented defenses to limit Allen to 20% ownership. Allen ended up going over 20%, so AOL had to take further action. With difficulty, AOL’s board eventually set restrictions to stop Allen from gaining more control.
• AOL executives then met with Allen, who complained that he should be able to invest as he wished. The executives told him they did not want any single major investor having too much control or influence over AOL.
• AOL executives then met with Bill Gates, CEO of Microsoft. At this point, Microsoft was just starting to get into the online services industry, despite AOL having launched five years earlier.

In summary, in its early years, AOL had to fend off aggressive investment and potential control from powerful figures like Paul Allen and Bill Gates as it sought to remain independent. AOL wanted to avoid being dominated by any single outside influence.

• AOL launched an aggressive marketing campaign in 1993 that involved mass mailing free trial diskettes to potential customers. This led to a huge influx of new members that threatened to overwhelm AOL’s systems. However, it also greatly increased AOL’s brand awareness and membership.

• AOL’s main competitors, Prodigy and CompuServe, were poorly positioned to compete. They focused on business users and were not user-friendly. They failed to anticipate consumers’ desire for chat rooms and email. By the time they tried to catch up, AOL had a huge lead.

• AOL’s chat rooms in particular were a key driver of its success. They fostered a sense of community and loyalty among members. An example was a group of quilters who had met in a chat room, designed a quilt online, and presented it to Steve Case. Though they had never met in person, they felt a strong connection through AOL.

• The success of AOL’s aggressive marketing campaign and chat rooms showed that online services could appeal to mainstream users, not just technology enthusiasts. AOL made the Internet accessible and compelling to millions of ordinary people.

• Despite criticism and skepticism about AOL’s sustainability, its strategy was wildly successful. By 1995, AOL had millions of members, though the quality of service remained uneven. AOL’s vision and understanding of mainstream consumers gave it a major advantage over rivals like Prodigy and CompuServe.

That covers the key highlights and events in AOL’s rise during this period. Let me know if you would like me to explain or expand on any part of the summary.

• AOL became popular in the 1990s due to its anonymity, unmonitored chat rooms, and ease of sharing photos. This allowed for the spread of sex chat and pornography.

• AOL knew this helped fuel its growth but tried to position itself as family-friendly. Its privacy policies set it apart and allowed it to surpass competitors.

• In 1995, Microsoft launched MSN as a competitor. AOL executive Ted Leonsis rallied employees by portraying MSN as a “dinosaur” and AOL as the underdog. AOL also pushed the government to investigate MSN.

• MSN had a poor launch, limiting its audience and offering a subpar user experience. It failed to gain traction against AOL.

• Critics said AOL would be hurt by the rise of the open Internet, but AOL added “Internet” to its name and made small acquisitions to seem Web-savvy. CEO Steve Case wanted AOL to appeal to all users.

• AOL had an aggressive negotiating style, evident during its “browser wars” in choosing between Microsoft and Netscape’s browsers. AOL executive David Colburn led hardball tactics that would later cause trouble.

• AOL’s tactics and arrogance during this time foreshadowed issues that would emerge after merging with Time Warner. Time Warner failed to recognize these warning signs about AOL’s corporate culture.

• David Colburn was a talented lawyer who worked for AOL. However, he was known for tormenting and humiliating whoever was on the other side of a deal. For Colburn, getting maximum concessions and leaving the other party frustrated was the sign of an excellent deal.

• In 1996, Colburn negotiated deals with both Netscape and Microsoft for AOL to bundle their browsers. Netscape assumed AOL would choose them and wouldn’t make a deal with Microsoft. But Colburn didn’t care what Netscape or the tech industry thought. He chose the deal that was best for AOL. AOL announced a deal with Netscape, then stunned them by announcing a non-exclusive deal with Microsoft the next day. Netscape felt betrayed, but AOL’s stock rose sharply.

• Around the same time, AOL CEO Steve Case began dating Jean Villanueva, AOL’s head of communications. This caused complications since they were still married to other people and Villanueva reported directly to Case. The relationship and how it might affect AOL’s management caused concern for AOL’s board and executives.

• Although AOL’s membership and stock price were growing rapidly, membership churn had become an issue. Many new customers would join AOL, then quickly leave for competitors. AOL’s strategy of maximizing membership growth was backfiring. AOL continued to charge by the hour while competitors offered flat-rate plans. AOL would have to switch to flat-rate pricing, but would then lose the revenue from hourly fees.

• AOL’s stock price fell sharply over the summer of 1996 as the challenges with membership churn, competition, and management issues caused concern for investors.

In summary, while AOL was growing quickly, several issues were threatening its success including an overly aggressive deal-making style, complications from Case and Villanueva’s relationship, increasing competition especially around pricing models, and membership churn.

• Journalist Chris Byron predicted the burst of the “AOL investment zit” in 1996, as AOL struggled with perceptions that it was doomed to fail or succeed.

• The author had been covering AOL for two years and witnessed many ups and downs. She felt AOL represented the best and worst of the emerging online world, and was on the brink of becoming a necessity.

• This realization came on August 19, 1996, when AOL suffered a 19-hour blackout. Though a disaster, it showed how much people relied on AOL. Steve Case’s apology letter spun it as showing AOL’s importance, though users found this appalling. Still, AOL saw it as a turning point, showing people needed AOL.

• On October 29, 1996, AOL announced a switch to flat-rate pricing and two other big moves: hiring MTV co-founder Bob Pittman, and a marketing deal with former NFL star Steve Young.

• Robert “Bob” Pittman was a colorful, ambitious radio programmer who co-founded MTV. After MTV, he struggled to match that success. He worked at Time Warner, having a hit with The Morton Downey Jr. Show and turning around Six Flags. But after selling Six Flags, he lost his job at Time Warner due to internal politics and a reputation for flash over substance.

• Still, Pittman remained a master salesman, and AOL hired him to bring sizzle as they moved to flat-rate pricing. The other announcement, a marketing deal with Steve Young, brought an athletic celebrity on board.

• These flashy moves showed AOL’s desire to revamp its image, though Pittman’s hiring in particular foreshadowed future troubles with the Time Warner merger.

• Bob Pittman was fired from Time Warner in 1993 due to cost-cutting measures. He then took a job as CEO of Century 21 real estate.

• In 1995, Steve Case invited Pittman to join AOL’s board of directors. In 1996, Pittman left Century 21 to become an executive at AOL.

• On the same day Pittman’s hire was announced, AOL also announced a $353.7 million quarterly loss. This was due to a change in accounting practices, where AOL could no longer spread marketing costs over two years. Critics argued AOL had been using tricks to make its numbers look better.

• In December 1996, AOL switched to a flat-fee pricing model, charging $19.95 per month for unlimited usage. This led to a huge increase in usage and frequent slowdowns and outages.

• In response, Steve Case asked members to “moderate” their usage during peak hours in a letter. This angered many members and led to criticism that AOL was greedy and unethical. AOL faced many legal challenges and public backlash.

• Steve Case in particular faced personal attacks, threats, and parody over AOL’s problems. AOL’s competitors also mocked them over the issues.

• In summary, AOL’s move to flat-fee pricing and resulting service issues caused major public relations problems and legal troubles in 1997. Bob Pittman’s hire was overshadowed by AOL announcing major losses on the same day.

• Gerald Levin, the CEO of Time Warner, told the author he was in “profound love” with a new woman named Laurie Perlman, a psychologist he had recently met.

• Levin called friends to tell them how happy he now was and how unhappy he had been before meeting Perlman. This openness and sharing of personal details were very unlike Levin, who was typically private.

• The news surprised many, including Levin’s wife of over 30 years, Barbara. Levin was leaving her and planning to move from New York to California to be with Perlman.

• Levin’s actions and declarations seemed out of character and abrupt. Friends and observers were shocked by the sudden changes in his life and personality.

• The news media also reported on and speculated about Levin’s new relationship, with some openly questioning whether he had gone “crazy.”

• The summary paints the picture of a suddenly transformed Levin, who appeared almost manically happy and willing to rapidly and radically change his entire life at age 65 based on a newfound “profound love.” His friends and wife seemed blindsided by these swift changes.

• There are hints that Levin may have been deeply unhappy before and was now making up for lost time by plunging into this new relationship with abandon and rejecting his old life in the process. His midlife crisis seemed to have hit with a vengeance.

• Gerald Levin grew up in Philadelphia and attended Haverford College, where he studied religion and English. He dreamed of being a novelist.

• Levin went to law school and began his career as a corporate attorney in New York. But he soon switched to working for David Lilienthal, who inspired Levin with his vision of combining social significance and business.

• Levin got a job in Iran working on a dam project, where he developed his belief in the importance of controlling distribution systems.

• In 1972, Levin joined Time Inc., intrigued by its focus on distribution and journalism. His first role was working on the business plan for HBO.

• Though an unlikely corporate climber, Levin rose steadily at Time Inc. under CEOs Ralph Davidson and Dick Munro. Levin oversaw many of Time Inc.’s biggest deals, including the purchase of Warner Communications.

• By the 1990s, Levin was CEO and pursued further expansion, acquiring Turner Broadcasting. The massive AOL-Time Warner merger in 2000 was Levin’s capstone deal.

• But the merger soon soured, and Levin became a scapegoat. He was ousted from the company he’d led for decades. Battered by the fall, Levin moved to California for a quieter life.

• Friends said Levin seemed happier and more open after his downfall. Levin claimed not to care about his reputation or legacy, though he remained defiant in defending his record.

• Levin saw himself as a “student of anthropology” who made an immense impact, though the AOL deal was “always off the mark” and it would “shake out” eventually. Levin felt no “respect” for his detractors.

• The summary suggests Levin was an enigmatic figure who cultivated a philosophical image. Whether sincere or a “poseur,” he was more visionary than a typical executive focused on short-term gains. His persona was etched by personal tragedy, making him seem “remote.”

That covers the key highlights from the summary on Gerald Levin’s unlikely rise and fall as head of Time Warner. Let me know if you would like me to clarify or expand on any part of the summary.

Here’s a summary:

• In the 1970s, Jerry Levin, an executive at Time Inc., believed television and new technologies like cable and satellites were changing how people consumed media. He proposed that Time invest in these new opportunities, like launching a pay cable channel called HBO. While risky, Levin’s bets on new technology eventually paid off and solidified his position at Time.

• In the 1980s, Levin’s technological gambles led to some failures and a demotion at Time. But he remained focused on transforming the company. In 1987, he proposed Time merge with Warner Communications and Turner Broadcasting to become an “entertainment-oriented communications company.”

• The Time-Warner merger in 1989 was contentious and created a power struggle. Time bought Warner for $14 billion to thwart a rival bid, saddling itself with debt. Warner executives got big payouts, while Time executives lost money and had to share power. The cultures clashed, with Time seen as genteel and Warner as vulgar.

• The Time-Warner merger was considered one of the worst media mergers. Bitterness lingered for over a decade. Time executives remained angry at the deal terms, while Warner executives felt portrayed unfairly as crass.

• The problematic Time-Warner merger served as a “dress rehearsal” for the later disastrous AOL-Time Warner merger. Jerry Levin’s desire for a “transforming transaction” and faith in technology led him into both deals. But the cultural issues and power struggles evident in Time-Warner would also plague AOL Time Warner.

• Overall, this history shows how the personalities, prejudices, and power dynamics of top executives can negatively impact major media mergers, even when strategic rationale exists. And it suggests that Levin did not seem to learn from his first botched attempt at transformation.

• Jerry Levin became the CEO of Time Warner after Steve Ross’s death in 1992. However, many believe that if Ross had lived, Levin would not have remained CEO for long given their differences in leadership style and vision.

• Levin was focused on the future of interactive communications and dreaming of ways to deliver information to people on demand. In contrast, Ross was more focused on Hollywood and the entertainment business.

• Shortly after becoming CEO, Levin announced the Full Service Network, an experimental two-way cable system that would allow users to shop, watch movies on demand, and play interactive games. Levin believed this would transform Time Warner into a leader of the future.

• To fund his vision, Levin made a deal with U.S. West in 1993 to sell 25% of Time Warner Entertainment for $2.5 billion. Levin said this meant “the future is here now.” However, many of Levin’s technology bets ended up being “big misses” that cost the company a lot of money.

• In general, Levin was seen as an ambitious corporate opportunist who manipulated politics and situations to gain power. His takeover of Time Warner and ouster of co-CEO Nicholas reinforced this view. However, Levin said he simply realized he was the best person to run the company.

• Levin acknowledged that while he and Ross were very different, they had an understanding. However, others believed Levin took advantage of Ross’s illness and death to gain control and push his own agenda. There were clear cultural differences between Time and Warner that made the merger very difficult.

That covers the key highlights and events in the summary on Jerry Levin taking over as CEO of Time Warner and pushing his vision for the future of media technology. Let me know if you would like me to clarify or expand on any part of the summary.

• In 1994, Gerald Levin, the CEO of Time Warner, launched an interactive TV service called Full Service Network (FSN) that allowed customers to access various services through their TVs.
• Levin invested $1 billion of Time Warner’s money and up to $5 billion more to develop FSN. At its launch, Levin insisted FSN was not “hype” but rather a groundbreaking new service.
• However, FSN struggled almost immediately. It had few subscribers, cost too much, had technological issues, and faced skepticism that people really wanted interactive TV.
• Meanwhile, Time Warner launched an Internet service called Pathfinder in 1994. Pathfinder aimed to provide online access to Time Warner content and help ordinary people get online. Time Warner saw Pathfinder as a way to eventually replace dial-up services like AOL.
• Pathfinder launched with lofty goals and comparisons to Time Warner’s history but soon became disorganized and messy. However, Time Warner executives were confident Pathfinder would be very profitable through revenue from cable operators, advertising, transactions, and premium services.
• Overall, Levin’s bets on FSN and Pathfinder were ahead of their time. FSN failed, and while Pathfinder helped Time Warner gain Internet experience, it did not achieve the success that was predicted. Levin later admitted he “hyped” FSN too much and that it should have been positioned more as an “experiment.”

So in summary, Levin made ambitious but premature moves into interactive TV and the Internet with FSN and Pathfinder. Though flawed, these services demonstrated Levin’s forward-thinking mindset and helped set the stage for Time Warner’s later digital success.

• AOL signed licensing deals with Time Warner in 1994 to offer Time Warner content to AOL customers. These early deals gave AOL legitimacy and provided revenue for Time Warner.

• Though Time Warner considered buying or investing in many internet companies, they mostly passed. They believed they could build their own successful internet business.

• Ted Turner was a volatile but brilliant media mogul who founded CNN and TBS. He had a troubled relationship with his father who committed suicide when Ted was young. Ted suffered from bipolar disorder but found stability after marrying Jane Fonda in 1991.

• Ted had long wanted to own a major TV network but had been blocked from buying CBS and NBC. He was angry that Time Warner, which owned a stake in his company, prevented his NBC bid. In a bizarre speech, Ted said Time Warner was “clitorizing” him.

• Though Ted’s outbursts were embarrassing, his successes made up for it. He was an idealist who wanted to change the world through media. Marrying Jane Fonda and medication helped stabilize his moods.

• Time Warner’s Jerry Levin blocked Ted’s NBC bid, angering Ted. Ted believed Levin acted in Time Warner’s interests, not TBS’s. The speech showed Ted was still prone to erratic behavior despite his newfound stability.

The key events are:

1. AOL’s early deals with Time Warner in 1994
2. Time Warner’s reluctance to invest in internet companies
3. Ted Turner’s volatile life, career, mental health issues, and marriage to Jane Fonda
4. Time Warner blocking Ted’s attempt to buy NBC
5. Ted’s angry “clitorizing” speech showing his lingering erratic tendencies

The summary highlights Ted Turner’s complex and dramatic life as a backdrop to his tempestuous relationship with Time Warner’s Jerry Levin. Their power struggle and Ted’s outburst foreshadow the coming merger of their companies.

By 1995, Time Warner had owned Warner for five years. The merger was bumpy at first but settled into a structure where division heads ran units independently. This resulted in infighting and lack of cooperation, epitomized by the battle over the Road Runner name. The online division, Time Warner New Media, struggled to gain support and make money. Walter Isaacson, its head, left in 1996 to become editor of Time magazine. In a memo, he said customers likely wouldn’t pay for a “disparate conglomeration” and Pathfinder should charge for “core, branded services” based on Time Inc. content. But the resulting Pathfinder Personal Edition failed. Despite huge traffic, Pathfinder couldn’t escape Time Warner and make money like independent Web companies. It was named to the Internet Hall of Shame.

• In 1995, Time Inc. CEO Don Logan described the company’s Pathfinder online service as a “black hole,” suggesting it was a money loser. His comment was seen as indicating Time Warner did not understand the Internet.

• By 1997, Time Warner’s efforts to get into online media, including Pathfinder and the Full Service Network in Orlando, were seen as failures that cost the company over $100 million. Critics said the efforts were too slow, too clunky, and did not understand community or link to outside sites.

• Time Warner CEO Jerry Levin worried the Internet would undermine his company. He was frustrated as Internet companies went public at high valuations, giving them power over media. He feared AOL could even take over Time Warner.

• Most Time Warner executives wanted a cautious strategy with limited losses. But Levin insisted on a big Internet bet to show Time Warner was leading media into the Internet age. He felt Time Warner lacked the talent and ability to compete online after its failures.

• Levin believed embracing technology was key to Time Warner’s future. The Internet failures wounded his confidence in the company. He worried upstarts would surpass Time Warner as it declined. He sought a path to change that, dedicated to finding solutions.

• The summary shows Levin’s mounting concern about Time Warner falling behind online, his frustration with its failed efforts and desire for bolder moves, the worries of other executives about big risks and losses, and Levin’s belief transforming for the digital age was key to Time Warner’s future. His concerns would soon lead to the AOL deal.

• The author received a $10 million offer on a cocktail napkin from a venture capitalist in 1999 to start a tech news website, despite having no company, staff, or product. The dot-com bubble fueled many absurd offers and valuations.

• The author had turned down an offer to work for AOL’s Ted Leonsis in 1997 while writing a book about the struggling company. Leonsis wanted the author to work for him to “skewer” people, though Leonsis had little media experience. The author regretted turning down AOL stock that would have been worth millions.

• By 1999, the author, then a Wall Street Journal reporter, was fielding many job offers from dot-com companies offering big stakes and deals. Venture capitalists were asking entrepreneurs if they wanted to become billionaires. The author wondered if she should accept the napkin offer or stay a reporter. She ultimately did nothing and remained a reporter.

• The author had moved to San Francisco in 1997 to cover Internet companies for the Wall Street Journal, though she disliked California. She was fascinated by companies like Amazon, Yahoo, and Netscape, whose 1995 IPO sparked the dot-com boom. Netscape showed venture capitalists that “concept IPOs” for companies with little revenue or profit could be hugely successful.

• After Netscape, the idea of “disruptive technology” that could upend industries took hold. Venture funding and IPOs skyrocketed. The rules for startups were blown up, with quick funding and hopes for fast “liquidation events.” The tech world believed technology could immediately overthrow business tradition, though this was “juvenile.”

The key events are the author receiving the $10 million napkin offer in 1999, turning down the AOL offer in 1997, Netscape’s pivotal 1995 IPO, and the rise of “disruptive technology” and loosened rules for startups. The summary touches on the absurdity and “juvenile” thinking of the dot-com bubble.

• In the late 1990s, the technology industry experienced a financial boom fueled by surging interest in the Internet, hype from the media and analysts, and questionable practices by investment banks. This led to huge instant fortunes for tech executives and founders.

• The author, a journalist, moved from the East Coast to Silicon Valley to cover this emerging story. Readers were fascinated with every aspect of the burgeoning digital culture and tech companies.

• Tech executives and founders eagerly invited journalists to experience and report on their lavish lifestyles, from Ferraris to fancy billboards to extravagant parties. The excess and arrogance eventually became wearying.

• The tech industry started with idealistic “missionaries” but was soon overtaken by greedy “mercenaries” focused on making money. Valuations and egos rose while business fundamentals were ignored.

• A charity auction in 1999 highlighted the frenzy and excess, with tech leaders bidding hundreds of thousands of dollars on items of little value, like dinners or ties belonging to famous venture capitalists. One tech leader’s wife criticized the author for writing about the pursuit of money, even as she served caviar at her multimillion-dollar mansion.

• In summary, the tech boom of the late 1990s brought huge amounts of money to Silicon Valley but also excess, ego, greed, and a suspension of disbelief that was difficult to comprehend even at the time. The idealism of the early Internet era soon gave way to lavish displays of newfound wealth and status.

• The Internet economy and companies were focused primarily on making money through initial public offerings (IPOs) and increasing stock prices rather than building viable and sustainable businesses. Companies were going public prematurely before establishing solid revenue and business models.

• Investors eagerly invested in Internet companies and IPOs, not seeming to care about fundamentals like revenue, profitability and business viability. They were caught up in the frenzy and hype. Short sellers who bet against overvalued Internet stocks usually lost.

• The media hyped up the Internet boom and largely failed to highlight the lack of revenue and profits to support the high stock valuations. Some journalists who pointed out issues were ignored.

• Extravagant spending was common, as exemplified by a dot-com party that gave away expensive champagne. The venture capital funding these companies received was largely flowing to America Online (AOL).

• AOL was able to use its large customer base and brand to attract funding from venture capitalists and dot-com companies. Deals with AOL could lead to successful, overvalued IPOs for companies due to the “halo effect.” AOL itself had faced many struggles but began turning around under new leadership focused on meeting quarterly numbers.

• AOL operated in a very bureaucratic, centralized manner under tight control of executives like Bob Pittman. They aimed to generate money through short-term deals rather than building a sustainable long-term business model. AOL was focused on using its power and influence to benefit itself, rather than helping its dot-com partners build solid companies.

In summary, the overheated Internet economy was built on hype, greed and a short-term mindset rather than viable business fundamentals. AOL in particular aimed to exploit this situation to strengthen its own power and influence.

• Steve Case and Bob Pittman did not particularly like each other but recognized that they needed each other. Case handled the long-term strategic thinking while Pittman focused on day-to-day operations.

• Pittman assembled an unusual team to help turn AOL into a money-making business. They were dubbed the “hunter-gatherers.” Key members included ad sales head Myer Berlow, marketing chief Jan Brandt, and service head Barry Schuler.

• Case worked closely with Ken Novack and Miles Gilburne on big strategic moves like the acquisitions of CompuServe and Netscape. They were seen as the “eggheads” by Pittman’s team.

• New CFO Michael Kelly helped bring order to AOL’s chaotic finances and accounting. However, AOL’s accounting practices were questionable and closely watched by regulators.

• Pittman focused on strengthening AOL’s brand and ad business. He adopted the slogan “So easy to use, no wonder it’s #1” and sold companies on expensive ad deals by touting AOL’s huge audience, even though no one knew if online ads really worked.

• The ad deals were hugely lucrative for AOL and its partners, sending their stock prices skyrocketing. AOL avoided traditional ad agencies in favor of direct deals with companies, especially dot-coms. Major deals included Tel-Save, CUC, Autobytel, Preview Travel, 1-800-Flowers, Barnes & Noble, Amazon, and eBay.

• AOL often got warrants to buy shares in the companies it did ad deals with, which became increasingly important. The ad deals and stock gains created a momentum that led to the Time Warner deal.

AOL’s stock price and revenue were soaring in the late 1990s, fueled in part by advertising deals with dot-com companies. AOL made investments in some dot-coms, which then bought ads from AOL. AOL also engaged in “barter” deals, exchanging services instead of cash. These practices raised concerns about conflicts of interest and improper accounting.

In 1997, the SEC forced AOL to restate revenue related to a $100M deal with Tel-Save. AOL had booked too much revenue too early. This was AOL’s second accounting issue in two years. But few paid attention due to AOL’s success. AOL’s aggressive deal-making tactics and accounting practices continued, setting the stage for future problems.

AOL’s business affairs team, led by Miles Gilburne and H.J. Colburn, was notorious for aggressive tactics against partners. They would change terms at the last minute, threaten competitors, remove attractive terms, and not follow through on promises. Many felt AOL took advantage of its power and “squeezed” partners. But some said the tactics were normal for the time, and AOL needed the deals and revenue.

AOL’s success allowed arrogance and questionable practices. Some executives worried AOL would end up resented like Microsoft. But Case and Pittman supported the team driving deals and revenue. The tactics delivered short-term gains that outweighed long-term concerns.

AOL used its high-flying stock to acquire companies like Netscape in 1998. These deals further boosted AOL’s stock price and stature. The Netscape deal was complex, involving Sun Microsystems, and done for many reasons: fighting Microsoft, entering Silicon Valley, diversifying, and lifting the stock price. It showed how unstoppable AOL seemed. But it also reflected the risky logic of the dot-com era.

In summary, AOL’s quest for deals and revenue in the late 1990s led to aggressive tactics, questionable practices, and risky logic that fueled its success but also sowed the seeds of future troubles. Short-term thinking trumped long-term concerns, setting the stage for AOL’s downfall.

• In 1998, AOL acquired Netscape for $4.2 billion. The deal gave AOL more credibility and prestige as an Internet company. It also made AOL executives like Steve Case and Ted Leonsis very wealthy through stock sales.

• Around the same time, Time Warner CEO Jerry Levin was facing difficulties. The company’s stock price was down, he was criticized in the media, and he was still dealing with the aftermath of the Time-Warner merger. In 1997, Levin also suffered a tragic personal loss when his son was murdered. The death caused Levin to reflect on what really mattered in life.

• Although the Internet boom led other media companies to make big investments in the digital space, Time Warner lagged behind. Levin had pursued interactive plans in the past, but seemed to abandon them after failures like Pathfinder and the Full Service Network. Some in the company were hesitant to overpay for dot-com companies with dubious business models.

• Other media companies like Disney, NBC, and USA Networks pursued deals to beef up their Internet presence. USA Networks’ Barry Diller tried unsuccessfully to acquire Lycos for $18 billion. Time Warner considered buying Lycos but couldn’t agree on a valuation.

• In 1999, Levin formed Time Warner Digital Media to reinvigorate the company’s Internet strategy. But the group struggled to find good opportunities in an overheated market where many Internet companies were overvalued.

• Overall, while AOL was riding high, Time Warner seemed stuck in a difficult position. Levin was facing personal and professional struggles, and the company couldn’t figure out a successful Internet strategy despite pressure to keep up with competitors. The scene was set for AOL and Time Warner to eventually join forces.

• In late 1999, AOL was interested in acquiring the AltaVista portal. They were close to a deal but it fell through at the last minute due to infighting at AOL over who would run the new unit.

• AOL then began focusing on creating topic-specific “hubs” to drive e-commerce traffic. At the same time, AOL was shutting down its Pathfinder portal.

• AOL CEO Steve Case was worried about the Internet boom and concerned that AOL’s soaring stock price was not sustainable. He wanted AOL to make a “transforming transaction” to diversify beyond its dial-up internet service.

• Case was interested in acquiring “fallen stars with real assets” rather than overvalued internet companies. He believed the internet would have a “profound impact” on media and communications.

• AOL made many acquisitions and investments in 1999 to expand into new areas as its dial-up internet service faced challenges. These included investments in interactive TV, handheld devices, high-speed broadband, and satellites. However, AOL struggled to effectively manage these new acquisitions.

• AOL lobbied regulators and pushed for “open access” to cable broadband networks. Cable companies opposed this and saw it as a threat. AOL invested in Comcast’s bid for MediaOne to try and gain influence over cable networks.

• AOL remained concerned about competition from Microsoft, which had investments in cable and might drop the price of its MSN internet service.

• In summary, AOL made many acquisitions and deals in 1999 to diversify from its dial-up service, but struggled to manage them well. AOL pushed for open access to cable broadband but faced opposition. AOL remained concerned about competition from Microsoft. Case believed AOL needed a “transforming transaction” to stay ahead of challenges.

• AOL was worried about its high stock valuation and needing to meet unrealistic growth expectations. Executives felt an “Internet nuclear winter” was coming and they needed to make an acquisition quickly while AOL’s stock was still highly valued.

• AOL considered four strategies: doubling down on internet companies, diversifying into business-to-business, diversifying into telecommunications, or diversifying into media. They discarded the first three options.

• Media was the most appealing, especially Time Warner. Time Warner had cable to solve AOL’s broadband problem, strong consumer brands, top management, low-risk businesses, and would help AOL compete with Microsoft. AOL saw it as a “good cultural fit.”

• Steve Case and Jerry Levin, CEOs of AOL and Time Warner, had met before but began seriously discussing a deal in September 1999. They were named co-chairs of an initiative on global e-commerce policy, giving them an opportunity to bond.

• Case pursued the deal aggressively. AOL adviser Ken Novack told Case that failing to capitalize on AOL’s high stock price “would be the biggest missed opportunity in history.” AOL saw Time Warner as the “end game.”

• Disney’s Michael Eisner rejected AOL and was angry they tried to discuss a deal without him. Other options like Yahoo, Amazon, Lycos, etc. had issues. Only Intuit, eBay, and Electronic Arts intrigued AOL.

• AOL’s team saw the Time Warner deal as solving strategic, financial and other needs. Especially, Time Warner’s cable would solve AOL’s “broadband problem.” But cultural fit would prove to be an issue, despite their initial view.

• The deal was first called “Project Tango.” AOL used military code names for potential partners, calling itself “Alpha,” Time Warner “Tango,” Disney “Whiskey,” News Corp. “Foxtrot,” Viacom “Victor/Charlie,” and Bertelsmann “Bravo.”

• Steve Case, CEO of AOL, and Jerry Levin, CEO of Time Warner, met at a conference in Shanghai and bonded over their vision of the digital future. They continued talking and explored the possibility of merging their companies.

• Case and Levin had further discussions and meetings, including with Time Warner’s largest shareholder Ted Turner. Initially, the talks focused on vision and synergies. But when they met to discuss specifics, Case pushed for a 60/40 ownership split in AOL’s favor and control of Time Warner’s cable systems. Levin felt this was an AOL takeover and the deal fell apart.

• With the deal off, AOL and Time Warner looked for other partners. Time Warner reached out to Yahoo, impressed with its co-founder Jerry Yang. AOL considered NBC and USA Networks. The stalking horses worked, and AOL and Time Warner returned to discussions.

• They agreed that Levin would be CEO of the combined company, AOL would have a large but minority stake, and Case would be chairman. The deal was announced in January 2000.

• Many were skeptical of the merger, seeing culture clashes and a lack of synergies. But Case and Levin were determined to show their vision. The deal made AOL’s shareholders very wealthy but ultimately did not live up to the promise and hype. The “deal of the century” unwound just a few years later.

The key points are:

1. Case and Levin bonded over a shared vision of the digital future but clashed on deal specifics.

2. The deal initially fell apart due to disagreements over ownership and control.

3. The threat of other options brought AOL and Time Warner back to the table.

4. The deal was visionary but faced many skeptics and ultimately did not succeed as promised.

5. AOL’s shareholders benefited greatly from the deal through increased stock prices.

Does this summary accurately reflect the key details and events around the AOL-Time Warner merger discussions and deal? Let me know if you would like me to clarify or expand on any part of the summary.

• Jerry Levin, CEO of Time Warner, contemplated the potential merger with AOL over the holidays in Vermont. He operated independently and secretly, without consulting many top executives at Time Warner.

• Levin’s style was not collaborative. He collected information and then made decisions alone. He worried that consulting others might lead to leaks and opposition to the deal. He showed disdain for those who disagreed with him, believing they lacked vision.

• Though Levin later said others were involved, he was the main driver and visionary behind the deal. Critics said his hubris in making the deal almost single-handedly, without debate from strong-minded executives, was problematic. Key executives like Jeff Bewkes and Don Logan were left out.

• Levin told the author he worried leaks might spur opposition to what he saw as a revolutionary idea. Others said wide consultation would have “killed” the deal. Levin wanted no obstacles and created a situation where he got none.

• While many later blamed Steve Case for duping Levin, Levin was complicit. He was convinced he had the right strategy and wanted to prove himself right against naysayers.

• Dick Parsons, a steady and diplomatic executive, was brought in to assess the deal. He wanted equal board power and for Levin to remain CEO. During talks, Levin, Parsons, and Bressler agreed to a 55-45 ownership split in favor of AOL.

• An omen appeared on Time’s cover, naming Amazon’s Jeff Bezos “Man of the Year.” Soon, Levin would top that.

• After the New Year in 2000, Gerald Levin decided that AOL was the right partner for Time Warner. He set up a small dinner meeting with Steve Case to finalize the deal. The meeting took place at Case’s home on January 6, 2000.

• The terms of the deal were worked out quickly at the meeting. It would be a tax-free stock merger, with Time Warner shareholders getting 1.5 shares of AOL stock for each Time Warner share. This valued Time Warner at $110.63 per share, a 71% premium. AOL would own 56% of the combined company. The board would have 8 members from each company.

• There was no “collar” on the deal to adjust the terms if stock prices dropped. Levin thought it would show confidence in the deal. Investment bankers thought it made sense at the time.

• After the deal was done, AOL executives had to quickly do due diligence to close the deal over the weekend. Coincidentally, eBay executives were at AOL to negotiate an acquisition, but AOL executives were distracted by the Time Warner deal.

• The AOL and Time Warner boards approved the deal at lengthy meetings on January 9, 2000. Documents touted the huge scale and potential synergies. Some risks were noted, like difficulties achieving synergies in a decentralized company.

• Time Warner’s board was largely complimentary of Levin for the deal. But board member Beverly Sills admitted being confused by it and planned to retire from the board. She was surprised AOL could buy most of Time Warner.

• Investment banker Joe Perella said Levin had a lot of credibility for the deal because he had been consistently right in his vision before. But even Perella didn’t foresee how Internet stocks and the ad market would soon weaken.

• The merger of AOL and Time Warner was troubled from the start. The two companies had very different cultures and ways of doing business.

• AOL executives made boastful and unrealistic projections about the financial benefits of the merger that they could never meet. This set the companies up for failure and embarrassment.

• There were many versions of the truth about what went wrong, depending on who you asked. Different groups blamed each other.

• A major problem was that AOL was relying on the booming Internet economy, but the dot-com bust began right after the merger. This hurt AOL’s business and revenue.

• An early sign of trouble was when AOL’s David Colburn said “Putz, we are” to a Time Warner executive, showing the condescending attitude some AOL leaders had.

• Steve Case and other AOL leaders sold a lot of their AOL stock even as they promoted the bright future of the merger. This made them seem disingenuous or like they lacked confidence in the company.

• The over-the-top self-congratulation around the merger announcement suggested that just completing the deal was seen as a victory, rather than the hard work of actually integrating the companies and achieving real results. This set the pattern for overpromising and underdelivering.

• There were many foreseeable missteps in how the merger was structured, handled, and messaged. But at the time, the mistakes were happening gradually and seemed more excusable. In hindsight, the problematic path is clear.

That covers the key highlights and main takeaways from this part of the AOL Time Warner merger story, as I understand it from your summary. Let me know if you would like me to clarify or expand on any part of this summary.

• The AOL-Time Warner merger announcement was portrayed as a historic moment, with executives making grand claims about the combined company’s potential impact and size. However, behind the scenes, many were skeptical about the wisdom of the deal and Jerry Levin’s motivations in doing it.

• The stock market and media initially reacted positively to the news, focusing on the large premium AOL was paying for Time Warner and the potential synergies. The deal seemed to validate the growing power of the Internet economy. However, some industry executives were stunned Levin gave up so much control.

• Reactions inside the two companies were mixed. Time Warner employees were happy about the increase in stock price and instant vesting of stock options. However, AOL employees were disappointed their stock price dropped, realizing the deal meant their era of independence was over.

• The merger announcement featured many executives on stage, symbolizing the challenge of integrating so many power players. There were early signs of tension, with Ted Turner expressing some reservations and Steve Case declaring ambitious goals.

• The optimistic rhetoric surrounding the deal failed to match the challenges involved in merging two very different companies and cultures. The merger would soon be haunted by dubious accounting methods used to maintain momentum and AOL’s arrogance in taking control of Time Warner.

• In summary, the initial euphoria of the deal announcement masked major difficulties that would emerge. There were no clear leaders or vision to guide the integration, setting the stage for infighting over power and control.

• AOL executives and employees were worried about losing control and autonomy after the merger. Many would not be able to vest their stock options for a year and were used to AOL’s high growth. AOL’s culture was seen as nimble while Time Warner’s was seen as slow-moving and political.

• Time Warner executives and employees were also concerned about the cultural mismatch and losing power to AOL. They saw AOL as arrogant and aggressive. Many were annoyed that AOL had essentially bought Time Warner.

• The top goal after the merger was to keep momentum and sell the vision. However, the vision of a high-speed digital future was unproven. To prove the deal’s worth, AOL Time Warner set very ambitious financial targets, including $1 billion in cost savings the first year and $11 billion in cash flow. These numbers were seen as unrealistic by many within Time Warner.

• AOL CFO Michael Kelly pushed hard to meet these targets, asserting tight control over Time Warner’s divisions. Kelly believed grinding pressure and central control were needed.

• AOL Time Warner also announced many new deals and partnerships to show the potential power of the merged company, though many at Time Warner saw these as hype. The announcements were aimed at maintaining momentum, led by AOL’s PR chief.

• In summary, cultural issues, loss of autonomy, and unrealistic financial targets and hype were significant problems right after the merger announcement. Tight control from AOL exacerbated tensions within the new company.

• Even before the AOL-Time Warner merger was finalized, there were struggles over how to communicate the deal to the public. AOL wanted an aggressive PR campaign to hype up the merger while Time Warner preferred a more low-key approach. AOL’s communications style was more political and promotional while Time Warner’s was more subtle and cozier with the press.

• The two companies aimed to close the deal quickly, by October 2000, to maintain momentum. However, government regulators and competitors raised concerns about the combined company’s power and size. AOL and Time Warner argued that they were in different industries so there were no anti-competitive issues.

• In May 2000, Time Warner temporarily pulled ABC off the air during a contract dispute with Disney. This angered regulators and critics, who accused Time Warner of monopolistic behavior. It also angered AOL executives who hadn’t known about Time Warner’s plans.

• Also in May, AOL Time Warner announced its new management structure. Steve Case became chairman, Jerry Levin became CEO, and Bob Pittman and Richard Parsons became co-COOs. This structure seemed to favor Pittman, indicating he was the heir apparent. Pittman, with experience in new and old media, oversaw growth areas like AOL and cable. Parsons, seen as duller, oversaw entertainment. There were concerns Parsons might not stay long at the company.

• Pittman, though not key in creating the merger, was the top exec with experience in both companies. He was seen as a schmoozer and salesman by Wall Street. For Pittman, becoming head of AOL Time Warner would be the pinnacle of his career. Though he said he didn’t want the top role, “it seemed as if it was his job to lose.”

• After the AOL-Time Warner merger was announced, Steve Case and Bob Pittman of AOL took over most of the senior executive roles at the new company, angering many Time Warner executives. Jerry Levin had given AOL control in order to get the deal done.

• Many Time Warner executives warned Levin that AOL would take control and Levin would lose power, but Levin ignored them. He thought AOL executives were more qualified and that a new culture would emerge from combining the companies. However, Levin underestimated how angry his decisions would make Time Warner executives.

• Levin fired Ted Turner from running CNN and Turner’s other properties. Turner felt betrayed and angry. His anger later fueled resentment toward AOL among others in the company.

• Ironically, AOL’s business started declining right around the time of the merger announcement. The dot-com bubble burst in April 2000, hitting AOL hard since so much of its ad revenue came from dot-coms. However, AOL’s business still looked strong on the surface for some time.

• Some Time Warner executives advised Levin to call off the deal in fall 2000 as Internet stocks declined, but Levin refused. He felt obligated to complete the deal and believed in its strategic rationale. Levin’s ego was also involved, and no one at Time Warner pressed him hard enough to change his mind.

• There were questions about whether AOL had inflated its revenues through dubious accounting to keep the merger together. An SEC fine of AOL in 2000 for improper accounting went largely unnoticed at Time Warner. More due diligence during merger talks might have uncovered problems.

In summary, the seeds of the merger’s failure were sown early on through AOL’s takeover of power, the dot-com bust that hurt AOL, Ted Turner’s anger, and questions about AOL’s accounting that went unexplored. But Jerry Levin’s determination to complete the deal and unwillingness to change course were also major factors.

• In 2000, many felt the AOL-Time Warner merger still had potential, especially since AOL’s stock was doing well relative to other tech companies. Time Warner employees were optimistic about benefits and potential windfalls from the deal. Initial cooperation between the companies was good.

• However, by late 2000 and into 2001, problems began emerging. Many of AOL’s deals with dot-com companies were at risk of falling through or needing to be renegotiated. AOL’s advertising revenue growth began slowing down. Some AOL executives warned of trouble, but top leadership insisted AOL was unaffected by the advertising downturn and that the merger would strengthen the companies.

• AOL’s stock price fell significantly from late 1999 through 2000. Though the deal terms couldn’t change, AOL pressed to complete the merger quickly. Regulatory approval came through in early 2001 after the companies agreed to some concessions like opening AOL’s instant messaging service.

• The merger closed in January 2001. AOL executives traveled to Time Warner’s New York headquarters, irritating some Time Warner employees. But AOL staff were excited to move from Dulles, VA to New York. Steve Case had achieved his goal of turning AOL into a media empire. AOL executives seemed confident they would show Time Warner how things should be done.

In summary, though problems were starting to emerge, optimism and confidence remained high for AOL executives leading up to and completing the merger with Time Warner. But their overconfidence and unwillingness to fully recognize the challenges they faced would soon prove detrimental.

• AOL came into the merger with Time Warner with an arrogant attitude and little understanding of Time Warner’s complex businesses. AOL executives believed they could easily impose changes on Time Warner, not realizing how delicate and intricately the company’s parts worked.

• AOL executives, especially Bob Pittman, were primarily focused on short-term results and efficiency. They had little patience for the kind of long-term thinking and relationship building that was required to lead Time Warner’s creative businesses. Pittman in particular was a controversial figure with a reputation for self-promotion and ambition. His hard-charging style clashed with Time Warner’s more hands-off culture.

• Nevertheless, AOL executives set about trying to quickly create one unified culture and push through changes at Time Warner. They believed this was necessary to achieve the financial targets promised to Wall Street. However, their efforts, like replacing Time Warner’s cash bonus plan with stock options, only created more resentment.

• AOL executives underestimated how much their presence and efforts were unwelcome at Time Warner. Their aggressive, “take-no-prisoners” style and perceived arrogance grated on Time Warner executives used to a more laissez-faire approach. AOL’s executives were seen as meddling bullies bent on imposing their will, not partners in a merger of equals.

• Ultimately, AOL’s failure to understand Time Warner’s culture and businesses, combined with their obsessive focus on short-term results, caused the merger to unravel. AOL was not able bring Time Warner into the 21st century, as it had boasted. Instead, AOL’s culture and influence faded away, subsumed into Time Warner’s more established one.

In summary, cultural arrogance and clashes, differing management styles, and a rush for quick wins undermined a merger that likely would have required years of patience and cooperation to achieve its goals. AOL proved unable to overcome its outsider status or gain allies at Time Warner, where its presence was barely tolerated. The result was a failed marriage and a humbling lesson in the challenges of merging very different companies.

• AOL replaced Time Warner’s lucrative profit-sharing plan with stock options. This move aligned employee compensation with the company’s stock performance but also increased risk. Many Time Warner employees were initially optimistic about the change due to AOL Time Warner’s strong early stock performance. However, as the stock price declined, employee morale and trust in leadership fell.

• AOL mandated that all employees use AOL’s email system to promote unity and cost savings. However, AOL’s email system was poorly suited to Time Warner’s more complex needs. This change irritated employees and symbolized AOL’s lack of understanding of Time Warner’s business requirements.

• AOL instituted frequent meetings between divisional leaders to encourage cooperation and sharing of best practices. However, these meetings often devolved into unproductive arguments that intensified divisions rather than built unity. There were vast differences in values and goals between AOL and Time Warner that these meetings could not reconcile.

• Some AOL leaders like David Colburn and Myer Berlow behaved rudely and aggressively towards Time Warner executives. Their behavior and disregard for Time Warner’s culture and hierarchy horrified and offended many Time Warner employees. These AOL leaders came to symbolize what was wrong with the merger for much of Time Warner. However, from AOL’s perspective, Time Warner was resistant to necessary change. Each side blamed the other for the failure to build an integrated company culture.

• In summary, many of AOL’s early moves to integrate the two companies and promote a shared culture backfired and intensified divisions. AOL did not fully understand Time Warner’s needs and priorities, and Time Warner was reluctant to accept AOL’s more freewheeling style of leadership. The result was a street fight that undermined the potential synergies of the merger.

• The author worked with Ted Leonsis, an AOL executive, who was confident and charismatic. However, his style sometimes came across as arrogant to others, especially after the AOL-Time Warner merger.

• Other AOL executives also had an abrasive style that didn’t mesh well with Time Warner’s culture. An AOL executive compared the situation to a “wartime scenario.” A Time Warner executive said AOL executives were like “Internet snot-noses.”

• There was resistance to cooperation on both sides. AOL executives pushed for changes that were sometimes right but delivered poorly. Time Warner executives didn’t want to take risks on digital businesses and felt like AOL was forcing changes on them.

• Tensions were high over online music. AOL wanted to use Warner Music artists and push them into new digital models. But Warner Music felt under attack by music piracy and thought AOL’s ideas were self-serving. Warner Music found AOL’s technology and management lacking.

• AOL executives thought Time Warner should embrace new digital models, like for movies. But their style and know-it-all attitude prevented real cooperation. Time Warner executives thought AOL didn’t understand how to operate in their businesses.

• In summary, clashes of culture, style, and business models caused tensions that prevented AOL and Time Warner from working together effectively.

The relationship between AOL and Warner Bros. got off to a bad start when AOL executives lectured Warner executives about the need to change how they made and sold movies to adapt to digital filmmaking. Fights broke out over various issues, including control of the Harry Potter website. Although AOL had heavily promoted the Harry Potter movie on AOL.com, Warner refused to give AOL control of the site.

Tensions were also high between AOL and Time Inc., Time Warner’s magazine division. Time Inc. executives resented AOL’s attempts to dictate how they should do advertising and market their magazines. When AOL pushed Time Inc. to provide exclusive photos and content for AOL.com, Time Inc. refused, saying they didn’t own the rights. AOL’s attempts to broker big cross-company ad deals were also a source of conflict. Although some deals were made, many felt the deals resulted mostly in lost money and unwanted advertising for the companies involved.

The conflicts highlighted the vast differences in culture and business practices between AOL and Time Warner. AOL executives were focused on short-term gains and pleasing shareholders, while Time Warner executives were more concerned with long-term business relationships and profitability. AOL’s hard-driving, ambitious style of dealmaking clashed with Time Warner’s more sophisticated, relationship-focused approach. Many Time Warner executives thought AOL’s way of doing business was clumsy, damaging, and showed a disregard for existing advertising relationships. The conflicts and power struggles between AOL and Time Warner’s divisions severely hampered attempts at cooperation and “synergy.”

In summary, cultural clashes, conflicting business practices, and power struggles between AOL and Time Warner executives caused tension, infighting, and hampered attempts at cooperation after the merger.

• Bob Berlow, a top executive at AOL Time Warner, resigned in 2002 because top management didn’t understand the vision behind the AOL-Time Warner merger and were resistant to change.

• Many Time Warner employees felt that AOL had taken advantage of them in the merger and depleted the value of Time Warner stock. They started to resent AOL’s arrogance and felt AOL’s business model was unsustainable.

• Don Logan, an executive at Time Inc., analyzed the business and found that AOL mostly had unstable dot-com advertisers, signaling trouble. However, AOL executives insisted all was fine.

• AOL launched an internal investigation into questionable ad deals in 2001, foreshadowing bigger problems. Time Warner execs worried AOL cared more about quick cash than business integrity.

• Massive cost-cutting measures, led by AOL executive Mike Kelly, further damaged morale at Time Warner and caused resentment of AOL. The cuts were especially painful at CNN.

• Kelly pushed division heads to meet unrealistic financial targets in an abrasive manner, damaging relationships. Even some at AOL warned this strategy was damaging.

• Ted Turner and other execs warned the financial targets were unrealistic, but top management insisted on sticking to the targets to prop up the stock price.

• When the company missed revenue targets in mid-2001, the stock price started dropping. AOL Time Warner gave a weak warning, but analysts kept targets high, blaming the economy. But internal memos showed the problems were bigger.

Overall, there were major culture clashes, unrealistic business strategies, and poor management that ultimately led to the downfall of AOL Time Warner. Resentment, resistance to change, and a quest to prop up the stock price despite obvious business troubles were major factors.

• Gerald Levin was the CEO of Time Warner for 30 years and led the disastrous AOL merger in 2000.

• He was intensely disliked within Time Warner for decimating employee retirement funds, handing control to AOL, failing to protect Time Warner, and arrogantly betting the company on a risky deal.

• The AOL Time Warner stock crash caused Levin to lose most of his $400 million net worth. He was forced to sell properties to pay off debts but still received millions in salary and pensions from Time Warner.

• Levin refused to admit the AOL merger was a mistake or that he was misled by AOL executives. He stubbornly insisted he was right despite nearly universal criticism.

• Levin’s contrarian and stubborn style defined his career at Time Warner. His insistence on the correctness of the AOL deal showed how out of touch he was with the damage it caused.

• The deep animosity toward Levin within Time Warner stemmed from employees seeing him as arrogant, ignorant of history and value, and responsible for the “catastrophe” of the AOL merger.

• Jerry Levin’s critics believe his last big move, the AOL-Time Warner merger, will end badly and leave him in trouble. Almost everyone associated with the deal suffers in some way.

• Ted Turner frequently erupts in rage against Levin, calling him names like “thief” and “liar.” Though dismissed as “just Ted,” Turner helps turn others against Levin.

• After 9/11, Levin claims he “snaps” and loses motivation. Many see this as an excuse and are disgusted by his attempts to benefit from the tragedy. However, Levin’s reactions seem genuine, though uncomfortable for others.

• The AOL-Time Warner board grows concerned about missed financial targets and offers Levin advice, which he ignores. He is isolated and unwilling to compromise.

• Steve Case, who envisioned the merger, removes himself from daily management. He wants Levin, Pittman, and Parsons clearly in charge. He stays distant, as he did at AOL with Pittman. But this aloofness causes problems when Case reengages.

• Case is also distracted by his brother Dan’s brain cancer. Dan Case is one of the few people Steve trusts. Dan faces poor odds but stays gracious, shifting priorities to health and family. He says the tech industry lost focus, embracing market share over quality. His comments foreshadow AOL Time Warner’s troubles.

• In summary, Jerry Levin’s autocratic leadership and isolation, Ted Turner’s rage, Steve Case’s detachment, and personal distractions like Dan Case’s illness all contribute to AOL Time Warner’s problems. The merger brings together leaders and a culture prone to messiness and “creative destruction.”

• Steve Case and Dan Case were close brothers, and Steve was devastated when Dan passed away from brain cancer in 2001. However, around that time, tensions were rising between Steve Case and Jerry Levin at AOL Time Warner.

• Levin was frustrated with Case for not canceling a board meeting after 9/11. Levin felt the company should focus on more than just profits. Case disagreed and felt the company needed to drive integration and focus on business. This caused clashes between the two.

• A key part of the AOL-Time Warner merger strategy was linking AOL to Time Warner’s cable assets. However, this did not happen, indicating the merger was not working. AOL’s dial-up business was stagnating, and it needed to shift to broadband. But Time Warner Cable’s Road Runner service was successful, and cable exec Joe Collins refused to work with AOL.

• Case wanted Levin to replace Road Runner with AOL, but Levin refused. Levin then rudely lashed out at AOL board member Miles Gilburne for questioning cable issues. Levin felt Gilburne was lecturing him on topics he knew little about.

• When AT&T’s cable assets became available, Levin pursued them aggressively despite Case’s arguments that it would bring regulatory scrutiny and the company had too much debt already. Levin felt merging the assets would boost the company’s high-speed power, though Case disagreed.

• In summary, tensions were rising between Case and Levin over control and direction of the company, especially regarding cable and broadband assets. Their clashing viewpoints indicated the AOL-Time Warner merger was struggling.

• Steve Case and Gerald Levin’s relationship deteriorated over time. By 2001, Case was actively working to oust Levin as CEO of AOL Time Warner.

• Case argued that Levin held onto overly optimistic financial projections for too long, was unwilling to work with others, kept the board in the dark, and ignored strategic issues. With Ted Turner’s support, Case pressed the board to replace Levin.

• Although some board members resisted removing Levin, Levin ultimately stepped down in December 2001, saying he wanted “poetry back in [his] life.” Levin seemed relieved to be leaving the role.

• With Levin gone, Dick Parsons, a genial and well-liked executive, was named CEO. Parsons had worked his way up from modest beginnings, serving in government roles before becoming a lawyer and rising to lead Dime Savings Bank. His selection was a victory for Time Warner executives.

• With Levin out, Steve Case lost the protection Levin had provided. Case’s role in ousting Levin and the unpopular AOL-Time Warner merger made him a target of blame as well.

Gordon Crawford, a major investor and advisor to Time Warner, became increasingly frustrated with AOL Time Warner’s management over the course of 2001 and into early 2002. The company was not meeting financial expectations and Crawford felt he had been misled about the true state of the business. In January 2002, the company revealed unexpectedly large losses in its AOL Europe joint venture and that it was ending a lucrative deal with Sun Microsystems that had been propping up AOL’s numbers.

After AOL co-CEO Bob Pittman gave an overly optimistic speech about the company’s prospects, Crawford confronted AOL Time Warner executives and expressed his anger at what he saw as a lack of transparency and forthrightness. He warned them not to let the AOL management negatively influence Time Warner. The company began trying to reassure investors like Crawford, with CEO Richard Parsons instituting a new policy of underpromising and overdelivering, rather than the hype of the past. Parsons also began repairing relationships within the company, including reaching out to Ted Turner.

In summary, growing losses and a lack of honesty about the challenges facing AOL Time Warner angered major investors like Gordon Crawford. In response, new management under Richard Parsons worked to change the company’s approach and culture to be more transparent and conservative.

• AOL’s email products initially did not meet customers’ needs, so the company made changes to give customers more choice. This was an embarrassing admission of failure.

• AOL also changed its policy to allow employees to invest their retirement funds in stocks other than AOL Time Warner shares. This was meant to reduce employee frustration with the company’s poor stock performance.

• AOL Time Warner took a $54 billion accounting charge to reflect the drop in stock value since the AOL-Time Warner merger. This highlighted the failure of the merger.

• AOL’s CEO Barry Schuler stepped down in April 2002. He was unsuited to run AOL during a downturn and lacked the leadership ability of his predecessor Bob Pittman.

• Pittman took over again as CEO. He was frustrated with Schuler’s inability to revive AOL and felt Schuler could not make the necessary cuts and changes.

• Pittman had an opportunity to turn AOL around, but there were doubts about whether he could adapt to major changes in the market. Competitor Yahoo had already announced plans to overhaul its struggling business.

• AOL made some executive changes, including hiring Jimmy de Castro to run AOL Interactive Services. But AOL’s key financial metrics were declining sharply. Revenue growth estimates had to be cut.

• In summary, AOL was in a dire situation in early 2002 due to management issues, competitive pressures, and a weak economy. Pittman faced a major challenge in turning the company around.

• AOL’s ad revenue declined 27% without internal advertising from other AOL Time Warner units. AOL was struggling in a weak advertising market and needed a major culture change that Bob Pittman was unable to implement.

• AOL’s subscriber growth slowed significantly. It took 75 days to gain 1 million new members, double the previous time. Growth was slowing each year as AOL ran out of potential new customers. Many new members joined through less profitable deals with PC makers.

• AOL lacked a broadband strategy. Developing broadband offerings was costly compared to dial-up. AOL made less money from each broadband customer because it had to share revenue with broadband providers. Pittman tried to convince members to avoid broadband, delaying the inevitable.

• In 2002, the author urged Pittman to focus on 5 things: improving AOL’s customer experience, strengthening the brand, developing broadband offerings, improving morale, and possibly spinning off AOL.

• Pittman found AOL’s problems were worsening. He was stretched thin trying to fix AOL and serve as COO. He told Richard Parsons he wanted to leave. A scathing NY Times article blamed Pittman for AOL’s troubles, angering Time Warner executives. With no room for promotion and losing support, Pittman had little chance to succeed.

• Pittman delayed announcing his departure so the board could approve a new management structure. Don Logan and Jeff Bewkes would head groups overseeing AOL, magazines, cable, books, HBO, studios, music, etc. Logan and Bewkes were top operators but initially opposed the merger. Logan turned around Time Inc. Bewkes ran HBO.

• Don Logan dies in 2002. He was a mathematician who specialized in abstract math. He pursued his doctorate part-time at the University of Houston while working for Shell Oil. However, he found the corporate life at Shell too slow.

• Logan then worked for Progressive Farmer, a publishing company in Birmingham, Alabama. Time Inc. acquired Progressive Farmer in 1985, and Logan became its CEO in 1986. Impressed by Logan’s consistent results, Norman Pearlstein brought him to Time Inc. in 1992 as president and COO. Logan significantly improved Time Inc.’s results, achieving 41 consecutive quarters of earnings growth and tripling its cash flow.

• Although Logan cultivated a folksy southern image and enjoyed fishing, he was a shrewd executive. He gave employees independence but demanded good results. Former Pathfinder executive Linda McCutcheon said Logan “was a straight talker in a culture of bullshit and platitudes.” Logan believed in growing incrementally to achieve greatness.

• In contrast, Jeff Bewkes, the head of HBO, was an outgoing, “golden boy” and a Yale and Stanford graduate. Bewkes quickly rose at HBO, building a close team that produced hits like The Sopranos and Sex and the City. AOLers mistakenly thought Bewkes shared their entrepreneurial spirit, but he was actually one of the first to criticize the AOL-Time Warner merger. Although Bewkes could navigate Time Warner, he wisely refused to take over AOL in 2002.

• Bob Pittman left AOL Time Warner in July 2002, saying “it’s time to take a break” after working hard to build AOL and going through the merger. Pittman told his staff, “Blame me for everything. … No one leaves gracefully.” Although Pittman did his best, others disagreed. Time Warner executives rejoiced at Pittman’s departure, viewing it as the end of the “horrible invaders.” However, media columnist Michael Wolff said Time Warner’s glee was misplaced, as Pittman walked away wealthy, and Time Warner remained troubled.

• On the day Pittman announced his departure, The Washington Post published an article detailing “unconventional deals” AOL used to boost ad revenue before and after the merger. The Post built on an Industry Standard article portraying AOL’s questionable practices. The Post described deals where AOL converted legal disputes and barters into ad revenue and booked other companies’ ad sales as its own revenue. The bottom line was that AOL aggressively accounted for low-quality revenue to maintain its growth.

• The article questions AOL’s accounting practices leading up to the merger with Time Warner in 2000. It points to several questionable revenue sources, like inflated ad revenues from eBay and stock sales, that allowed AOL to meet Wall Street’s expectations and proceed with the merger.

• Although these revenues made up a small portion of AOL’s total revenue, the article argues the deals looked suspicious, especially in light of the corporate scandals unfolding at the time. The revelations led to government investigations by the SEC and DOJ.

• AOL defended itself, saying its accounting was appropriate and the questionable revenues immaterial. But even some AOL executives admitted the company had unrealistic expectations for sustaining its growth.

• The news damaged AOL’s reputation and stock price. AOL’s CEO Dick Parsons had to report the SEC investigation on an earnings call, leading to further declines. The company also fired David Colburn, head of the unit responsible for the dubious deals. However, his contract prevented him from being officially terminated without cause.

• The author cites sources calling AOL overly aggressive and implying it may have misled Time Warner to get the merger done. The revelations and subsequent government scrutiny added to the turmoil at AOL Time Warner. Parsons had little choice but to pledge cooperation, even as he had to certify the accuracy of AOL’s financial statements under the new Sarbanes-Oxley law.

• In summary, the news article and its fallout highlighted AOL’s dubious accounting practices before and during the merger, damaged its reputation, and led to legal trouble — all of which compounded the difficulties in integrating the AOL and Time Warner businesses.

• Steve Case stepped down as chairman of AOL Time Warner in May 2003 after nearly 20 years running AOL. He did this to appease angry Time Warner employees and shareholders, though he remained on the board.

• Case’s reputation was in tatters due to the failure of the AOL-Time Warner merger. He was seen as responsible for the disastrous deal and the aggressive culture at AOL. Many called for his ouster.

• Case made nearly $400 million by selling AOL stock just before and after the merger, angering employees who had lost money. Though other executives also profited, Case was seen as most culpable.

• Case refused to take blame for the merger’s failure and continued to defend it as a good idea. He remained defiant even as he gave up the chairman role. However, AOL employees continued to revere him as an icon who had sheltered them from the dot-com bust.

• Some analysts argued that Case had actually helped AOL shareholders by getting Time Warner to buy AOL stock at the height of the tech bubble. AOL stock likely would have plunged much further without the merger.

• Time Warner employees remained extremely angry at Case and felt nothing short of his resignation would suffice. The mood was to knock down any remaining vestiges of him at the company.

• Overall, while Case avoided losing everything in his partial ouster, his reputation was left in tatters due to blame for the AOL-Time Warner debacle. The once-visionary leader who saw the promise of convergence was now seen as the man who engineered one of the worst mergers in business history.

• Gordon Crawford, a powerful media investor, was angry at AOL Time Warner and Steve Case in particular for the company’s troubles and declining stock price.

• Crawford blamed Case for much of the company’s problems and thought he should resign as chairman. Crawford conveyed this view to Ted Turner and John Malone, who agreed.

• When Crawford told Case directly that he should resign, Case refused and denied responsibility for the company’s troubles. He blamed others, including former CEOs Jerry Levin and Bob Pittman.

• Crawford and Case met again, but Crawford’s view did not change. He continued to insist that Case resign. Case wanted to repair their relationship but would not admit fault or resign.

• AOL Time Warner named Jon Miller as the new chairman and CEO of AOL in an attempt to move past the company’s troubles. Case had wanted Thomas Middelhoff for the role but went along with Miller, who was seen as a safe, controversy-free choice.

In summary, Steve Case refused calls from major investors, especially Gordon Crawford, to take responsibility for AOL Time Warner’s problems and resign as chairman. The company instead brought in Jon Miller to lead AOL in hopes of stabilizing the situation.

• Ted Leonsis, a longtime AOL executive, advocated for improving customer service and returning to AOL’s roots. He took on a bigger role in September 2002 to help turn around the company.

• AOL reorganized its leadership under CEO Jon Miller, simplifying the company and focusing on increasing profits per customer. The company moved away from a growth-at-all-costs mindset.

• The launch of AOL 8.0 in October 2002 aimed to signal a turnaround, though it included some odd moments. Steve Case told a story suggesting he was not fully in control of AOL anymore. The event focused on cheerleading for employees.

• A week after AOL’s launch, Microsoft held an event for MSN 8.0 portraying itself as a more mature company. Bill Gates and Steve Ballmer appeared in a video as butterflies to promote the service. The event aimed to show Microsoft’s commitment to competing with AOL.

• Overall, AOL was attempting a turnaround in late 2002 under new leadership and a renewed focus. But many problems remained, and questions continued around Steve Case’s role and control.

• AOL held an event to launch AOL 8.0 and attack rival MSN. AOL portrayed itself as the underdog despite having more customers. The event temporarily boosted morale but AOL 8.0 was seen as inferior to MSN 8.0.

• AOL Time Warner had to revise its financial results again, reducing revenue by $190 million and earnings by $97 million, due to issues with online ad deals. The CEO promised no more surprises but said big changes were coming.

• A month later, the CEO said it was time to stop criticizing past mistakes and move on. AOL unveiled a new strategy to analysts, admitting past sins and promising to change. Plans focused on content, broadband, and working with other divisions. But the company also announced declining ad and commerce revenue, overshadowing the new strategy.

• Steve Case tried to get more involved in fixing AOL and build ties with new executives. He still saw himself as a visionary who could guide the combined company. But his critics grew louder, especially after he clashed with an executive at a meeting over his focus on “convergence.”

• Though reports predicted Case would be removed as chairman, he actually had enough board votes to stay on until 2003.

The key events are AOL’s troubled attempts to turn things around, executives’ calls to move past mistakes, Case’s efforts to remain involved despite growing criticism, and the company’s continuing financial woes.

• Steve Case refused to resign as AOL Time Warner chairman despite pressure to do so. He was determined and difficult to shame.
• Ted Turner and others floated the idea of spinning off AOL. Case opposed this and tried to build support with Turner.
• A series of setbacks weakened Case’s position, including a lawsuit over AOL’s accounting issues and various slights that showed his unpopularity.
• Tension grew between Case and AOL CEO Don Logan, who wanted more authority and less involvement from Case. Logan criticized Case’s leadership style in the media.
• Investor Gordon Crawford planned a campaign to oust Case at the May shareholder meeting. Case stepped down before this could happen.
• Case’s brother Dan died in 2002 after battling brain cancer for years. This likely contributed to Case’s decision to step down.
• Dick Parsons succeeded Case as chairman. The board unanimously voted him in shortly after Case’s announcement.

The key figures are:

• Steve Case: Co-founder and longtime CEO of AOL, chairman of AOL Time Warner. Ultimately stepped down due to pressure and personal loss.
• Don Logan: CEO of AOL who clashed with Case and wanted more control.
• Ted Turner: Major shareholder who advocated spinning off AOL. Had a strained relationship with Case.
• Gordon Crawford: Activist investor campaigning to remove Case.
• Dick Parsons: Time Warner executive who succeeded Case as chairman.

The events show the turmoil, power struggles, and personality conflicts within AOL Time Warner’s leadership following the merger. Despite his dedication, Case ultimately lost control and was forced out.

• Dick Parsons succeeded Gerald Levin as chairman of AOL Time Warner. Some thought the chairman and CEO roles should be split, but most agreed Parsons was the right choice given the turmoil at the company. However, questions arose about Parsons’ leadership and responsibility for the failed merger. While not directly to blame, Parsons was complicit for not stopping the merger.

• Parsons’ goodwill and affable manner helped calm tensions at the company. Time Inc.’s editor felt Parsons had united the company in a way Levin never could. However, AOL Time Warner’s stock price continued to fall.

• In January 2003, AOL Time Warner announced a $45.5 billion charge and a $99 billion net loss for 2002, the largest in corporate history. AOL also suffered its first quarterly subscriber loss. Ted Turner resigned as vice chairman, frustrated with his lack of power and dwindling fortune.

• More accounting issues emerged, including a dispute over $400 million in ad revenue from Bertelsmann. AOL Time Warner faced many challenges, including selling assets to cut debt, completing an IPO of its cable division, and moving into new headquarters.

• Turner became increasingly erratic, giving interviews lamenting his losses and worries about humanity’s extinction. He sold half his AOL Time Warner shares in May 2003 to diversify, losing $120 million in potential gains within a month. Turner was ultimately responsible for robbing himself.

• In February 2003, the author attended a Valentine’s Day party in Silicon Valley hosted by a venture capitalist. Despite the difficult years, the tech leaders at the party seemed animated and enthusiastic. The tech scene had little investment or energy. The time of the AOL Time Warner merger seemed long ago.

• In February 2003, AOL Time Warner held a management offsite in New York City. The mood was tense, especially for AOL executives who faced criticism and jokes from Time Warner executives. AOL head Jon Miller described the AOLers as desperate to leave the event.

• The event highlighted the continued acrimony between AOL and Time Warner. Time Warner executives expressed a desire to remove AOL from the company name. Comedian Wanda Sykes also made jokes criticizing AOL and Steve Case.

• In contrast, at a party taking place at the same time in Silicon Valley, the tech community still admired AOL and Steve Case for their role in bringing mainstream customers online and fueling the growth of tech companies. Many saw Case as a “phoenix” who could rise again. The partygoers valued risk-taking and viewed failure as a learning experience.

• Not everyone shared this view. One venture capitalist pointed out that he had always been skeptical of AOL. Media columnist Michael Wolff believed AOL was more of an “illusion of a company than a real company.”

• Still, the author remained optimistic about the potential impact of technology on the future. While much of what AOL and Case promised was “bunk,” the idealism behind their visions was quintessentially American. Technology would continue to profoundly transform the future in both hopeful and deceitful ways.

• In summary, the events highlighted the stark contrast in how AOL and Steve Case were viewed by Time Warner executives versus members of the tech community. But regardless of the criticism, AOL’s role in shaping the digital future and bringing new technology to mainstream customers solidified its place in history. The ultimate legacy of AOL remained complex and open to debate.

The passage discusses the challenges facing AOL Time Warner in moving forward after the disastrous merger of AOL and Time Warner. Though the merger was intended to help Time Warner transition to the digital age, anger and recriminations within the company have made progress difficult. However, the author argues that the company must look to the future, as technology will continue to transform media. Though AOL in particular faces many problems, including low morale and a short timeline to turn things around, its executives are working to refocus the company. If history is any guide, the Internet’s influence—though it has gone through ups and downs—will only grow in the future. The key is for companies like AOL Time Warner to position themselves for the “inevitable future.”

• The Internet and personal computer were initially dismissed but grew exponentially. Many experts made incorrect predictions about their limited potential.

• The Internet has matured over the past decade but still has a lot of potential for growth, especially globally. It has become an integral part of life for many and will likely become even more essential and ubiquitous.

• AOL was an early leader but now faces many challenges, including slowing subscriber growth, decreasing ad revenue, the need to move to broadband, executive turnover, government investigations, and shareholder lawsuits. Its future is uncertain.

• There are a few options for how to fix AOL: cut costs and maximize profits from its current assets; invest in new offerings and technology to leverage its brand and subscriber base, though risky; or sell all or part of the company to others better positioned. The solution may involve some combination of these.

• Key problems for AOL include:

1. Lack of passion: Early passion and mission drove AOL but faded. Renewed passion and excitement are needed to attract top talent and compete. This is hard to manufacture but success, innovation, and vision could help.

2. Dial-up dilemma: AOL needs to move subscribers to broadband but risks losing them in the process. It must incentivize the move to broadband while keeping subscribers engaged with new content and services.

3. Ad struggles: AOL’s ad revenue has dropped significantly. It needs to improve ad targeting, tap into new ad formats, and attract new advertisers, especially to new content areas like digital music.

4. Content conundrum: AOL has a lot of content but needs the “right” content that can attract new users and advertisers. It must invest in and partner with leaders in key growth areas like digital music.

5. Brand blahs: The AOL brand has been tarnished and needs to be revitalized to signify innovation, value, and “coolness” again. A new marketing campaign could help but product and partnership successes are most critical.

In summary, AOL faces many challenges with its legacy dial-up business and brand but still has significant assets and potential for growth if it can reignite passion and innovation, incentivize the move to broadband, improve advertising, invest in the right content, and revitalize its brand. Success in any of these areas could build momentum to help fix the other problems. With its considerable resources, AOL has a chance for a comeback if it can recapture the vision and spirit that spurred its early growth.

• AOL’s success depends on retaining experienced and enthusiastic employees, especially those who can motivate and rally the troops. However, AOL risks losing these people as it implements more controls and structure. AOL needs to find the right balance between order and innovation.

• AOL’s product has stagnated for years. It needs to significantly improve core offerings like email, chat, and anti-spam tools. It should follow fast on the heels of industry leaders and web innovations. AOL’s latest version 9.0 made some much-needed improvements but still lags competitors. Continued product innovation is key to AOL’s success.

• Declining subscriber numbers and poor customer service are linked problems for AOL. As its potential subscriber base shrinks, AOL must focus on keeping existing customers happy. Improved customer service, more useful tools and features, and possibly lower prices could help. AOL should cut marketing costs and invest more in R&D and customer service.

• AOL initially grew popular by fostering online community. But now AOL interferes too much and doesn’t provide sophisticated enough tools for users to connect. AOL should get out of the way and let users shape the community. It needs to offer cutting-edge tools for user interaction and connection, especially to retain younger users.

• AOL’s brand has been damaged significantly in recent years due to corporate troubles and lawsuits. Returning to the Time Warner name and separating the AOL service brand could help address this. The AOL service itself remains popular, so rebranding and refocusing on the service could revive the brand.

In summary, the keys to AOL’s success are: fostering innovation, improving products/service, enabling community, and reviving the brand. Significant changes are still needed, but AOL appears headed in the right direction. The challenge will be implementing changes quickly and effectively enough to overcome substantial hurdles.

Problem: Decline in Ad Sales

AOL’s ad sales have declined due to its past practices of making unrealistic deals that did not benefit clients and confusing ads with content. However, online ad sales are growing again as advertisers experiment with targeted, video and audio ads. AOL needs to rebuild trust, shift to a traditional ad structure, and pursue high-growth areas like paid search and online classifieds that it has missed.

Problem: Whither Content

AOL’s recent content deals are unrealistic. Creating hit original content for the web is difficult and uncertain. Users do not seem to want premium content from AOL. AOL should focus on curating and pointing to existing content rather than creating its own.

Problem: Need for Personalization

AOL has failed at personalization, foisting a one-size-fits-all experience on users. It needs to give users more control to customize their AOL experience. Programmers cannot design an experience to suit all users. Letting users decide will solve many problems and allow AOL to learn about user preferences.

Problem: Will People Buy Premium Services?

AOL’s plan to sell premium add-on services is risky. Users expect a single bundled service from AOL and may reconsider AOL’s worth if presented with many add-ons. This strategy also treats customers as objects to leverage rather than serve.

In summary, AOL needs to:

1. Rebuild trust in the ad community and shift to a traditional ad model pursuing high-growth areas like paid search.

2. Focus on curating content rather than creating its own. Provide more user control and personalization.

3. Be cautious in rolling out premium add-on services which risks alienating loyal customers who expect a simple bundled offering. The strategy risks viewing customers as objects to leverage rather than serve.

4. Protect and nurture the AOL brand which is one of its greatest assets. Removing “AOL” from the corporate name allows the brand to refer solely to the online service.

5. Have realistic expectations about content and ad partnerships. Online content and ads will grow but not as quickly as hoped. AOL must start from scratch to remake its reputation.

In summary, AOL needs to get back to basics, nurture its brand, rebuild key relationships, and avoid unrealistic strategies that risk alienating customers or rebranding as something it is not. With realistic expectations and by refocusing on customers, AOL can succeed. But a quick revolution is unlikely. Success will require “basic block-and-tackling work.”

• AOL should shift its focus from squeezing profits out of existing members to providing more value and benefits to retain them. Treating members as “cows to be milked” will cause AOL to lose more subscribers.

• Rather than focus so much on broadband, AOL should provide services that people want to pay for, regardless of how they access the internet. Cable and phone companies are not good at creating compelling services, giving AOL an opportunity. AOL should stress providing a good experience however people access the internet.

• AOL should embrace the PC as the hub for people’s digital lives rather than pushing into other devices and platforms where it does not excel. It should follow Apple’s lead in creating a seamless digital experience centered around the PC. This could include helping integrate people’s various devices and accounts.

• AOL should settle with the government investigations and lawsuits as quickly as possible to move past them. While the charges may be unfounded, the damage is done. Settling and moving on is in everyone’s best interest. Lawsuits could ultimately cost AOL $5 billion or more.

• AOL may be better off independent from Time Warner. Without strong leadership enforcing synergies, being part of Time Warner provides little benefit to AOL. AOL may have more freedom and flexibility to adapt as an independent company.

The key points are that AOL needs to refocus on serving and retaining its members, embrace the role of facilitating people’s digital lives centered around the PC, put its legal troubles behind it through swift settlement, and may benefit from becoming independent again. The company has lost its way and needs a fresh start with a renewed customer-centric strategy.

• AOL has suffered the most from the merger with Time Warner, unable to innovate or invest due to oversight from Time Warner executives. AOL may need to be spun off to thrive.

• However, selling AOL now would be a “fire sale” and “act of desperation.” It may be better to stabilize AOL first before selling. Some still see potential value in AOL.

• Time Warner does not seem to have the passion or understanding of the online space to properly utilize AOL. They seem more angry at AOL than committed to helping it succeed.

• AOL executives like Ted Leonsis remain passionate about the digital future and AOL’s potential, even after all the troubles. The author also still believes in this promise.

• Ultimately, the summary is that AOL continues to suffer under Time Warner, though some still see its potential value. But Time Warner does not seem able or willing to properly support AOL, suggesting a spin-off may be needed for AOL to thrive again.