Steve Case to step down from AOL Time Warner

Posted on 13 Jan 2003 at 11:37

Steve Case is step down as AOL Time Warner chairman, finally carrying the can for the failing AOL-Time Warner merger.

The new company has lost 70 per cent of its value since the merger took place, back in January 2000. The change will be effective as of the company's annual shareholders meeting in May. Dick Parsons remains CEO.

'As you might expect,' said Case in an official company statement, 'this decision was personally very difficult for me, as I would love to serve as Chairman of this great company for many years to come, and as an architect of the merger I have felt it was important that I stay the course as Chairman and help get things on track. However, after careful consideration, I believe stepping down is in the best interest of the company.'

Case gave three reasons for the change. First of these is his belief that the criticism directed at him personally for the company's post-merger performance has become a distraction for the business. Second, he maintained that a transition had already been made to a new leadership team and the company was now entering into 'more of an execution phase'. Finally, he emphasised the role that he will still be playing within the company, beyond that of chairman - he will remain a director and continuing to co-chair the company's Strategy Committee.

As you would expect, Case still remains bullish about AOL. 'The bottom line is this: I love the company, and will do whatever I can to make it successful. I believed in America Online when we built it; I believed in AOL Time Warner when we created it; and I continue to believe in the great potential of this company and its people. While my role will change, my enthusiasm for what this company can accomplish won't diminish.'

Steve Case is the entrepreneur who rode the America Online ISP on the biggest wave of the dot com frenzy. He used the market (over) capitalisation of AOL to manage the take over of the world's largest media companies, the old-media Time Warner. In retrospect, this marked the historic high point of the dot-com era.

Having translated AOL into a media giant, however, the company began to be faced with more awkward questions about its finances and revenue. Investors started to examine the new media company with the sober judgement they applied to old media companies - it was no longer an Internet company, with supposed Internet growth rates. On this basis, the merger has signally failed to work.

The company has since been investigated by the American Securities and Exchange Commission and the Justice Department over its accounting practices for calculating online advertising revenue.

Author: Alun Williams