AOhell: Some people never learn

Steve Case wrote a Washington Post op-ed yesterday that made the lead of the front page of The Times today, pushing for breaking up the merger he made.

Pardon me for being just a little cynical, but the Time Warner stock I got while working there, which I stupidly held onto, was the FU money that F’ed me. And Steve Case is greatly to blame. He is the snakeoil salesman who sold a bill of goods — a company whose strategy he neglected — to the gullible, directionless, frightened fools at Time Warner.

Yet in the Post op-ed, Case is incredibly unselfaware. He paints AOL is the victim in the worst merger in history. And he doesn’t bother taking for engineering that failure.

While most criticism of the merger has focused on how it has failed to yield the expected benefits for Time Warner, it is worth noting that the combination has not helped AOL much either. Some benefits that AOL expected — such as replacing Road Runner, Time Warner’s broadband cable service — did not materialize. Meanwhile, unexpected roadblocks — such as internal pressures slowing AOL’s efforts to make Internet telephone service commercially available — unfortunately did. Instead of propelling AOL to new heights, the association with Time Warner has weighed AOL down, while its competitors, such as Google and Yahoo, have made important strides forward.

Case argues that Time Warner should be split into four parts: cable, publishing, entertainment, online. I actually agree on that score, as I agree with Carl Icahn that a drastic and clean split has to be made. Richard Parsonsis taking the baby steps that have always been characteristic for the company: He hinted at selling AOL, which was only a feint, and then at selling a piece of AOL, also a feint, to try to raise the value of an ad/distribution deal with Google or MSN. He doesn’t do the strategically bold thing. The last strategically bold thing this company did was merge with AOL. Ah-hem. The last strategically bold thing they did before that was merge with Warner Bros. and the only reason that worked was because there was a mogul, Steve Ross, truly in charge of the company. After that, the company was not run on vision. Instead, they thought it would be run on cooperation … in a culture where everyone hates everyone else. They still haven’t figured out how to spell sinergy synergee cynirgy synergy. So without a mogul truly in charge — a Ross or a Murdoch — the only sensible option for Time Warner is to break it up.

And the day that happens, I’ll sell my stock as fast as I can. I’ll be more than happy to sell that AOL stock to Steve Case. That would be justice.

  • Lou Josephs

    Yeah I read that yesterday in the Post.. considering what “high estem” the AOL brand has these days..making it your phone company…Steve are you crazy.
    Verizon when the figure out FTH will own just about all the things Uncle Steve talks about.
    The niche portal thing does works but the content, yech

  • I.F. Stoner

    Wanna know the fun part, Jeff?
    When they spin off heaving chunks, look for insane and totally bogus valuations of “goodwill.”

  • Old Grouch

    Synergy works when it means breaking down barriers and slaughtering sacred cows to produce a better product. In TW’s case, divisions continued protecting their individual walled gardens to the detriment of the company overall… not surprising. They can’t/won’t change the culture, so breakup is the answer.

    Thing is, once that happens, there will be people in the cable company who’ll be thinking, “Gee, it’d be neat if we produced our own content.” And people in the entertainment company who’ll say, “If we really want to make money, we’ve got to own our distribution channel.” Etc, etc.

    So if you’re going to sell, do it quickly!

  • tigh

    Sorry for your not cashing out at the top of TW’s value. Sorry you drank the cool ade of the merger.
    But, I happen to agree with Mr Case’ assertion that AOL was ignored. While everyone at Time Warner bitched and moaned about how Gerald Levine and Steve Case botched things up, Terry Semel built Yahoo into the company it is now. They did this through focus, hard work and without the assets that Time Warner had to bring to the table. Sorry but Case was right on that point.
    Case was also right to merge the two at the time. He had the forsight to know the Internet bubble was coming to a head and he needed to protect the company he built.
    As far as Icaan goes, he has a long history of being a corporate obstructionist. He built his empire on it… Making a lot of noise and selling short.
    Dont blame Case for the mess at TW…

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