Case Resigns as AOL Time Warner Chairman
Enviado: 13/1/2003 10:42NEW YORK (Reuters) - Steve Case resigned as chairman of AOL Time Warner Inc., the company said Sunday, as the Internet visionary succumbed to scathing criticism that the record media merger he helped to engineer was a failure.
The resignation, effective in May, completes the exodus of the key architects of the $106.2 billion deal, which irked investors for not delivering on its promised to supercharge growth by marrying old and new media.
"Case was clearly ineffective and I didn't see any direction coming out of the company under his leadership," said Tim Ghriskey, president of Ghriskey Capital Partners LLC, a Greenwich, Connecticut-based fund that has sold its stake in AOL Time Warner.
Case, an Internet pioneer who brought e-mail to the masses and built a start-up into the world's largest media company, told Reuters in an interview that he decided to leave so he would not be a distraction to the company.
AOL Time Warner stock has fallen 70 percent since it completed the biggest media merger in U.S. history in January 2001, suffering from the meltdown of the Internet economy, the collapse of the advertising market and federal probes of America Online's accounting practices.
Case acknowledged the blockbuster combination fell short of expectations he had when the deal was announced in January 2000.
But he defended its premise, nonetheless.
"It was a good strategic move for both companies even though I acknowledge things at this particular juncture have obviously not gone the way I or anyone else has thought it would," he said in the interview.
WEEKEND DECISION
Case, a co-founder of America Online, notified Chief Executive Richard Parsons and the board of directors of his decision over the weekend -- a day after the second anniversary of the completion of the merger that created the world's largest media company. It will be effective in May.
"Although I prefer being chairman and I'll miss not being chairman and I'm obviously disappointed by it, I still will continue to play a role," Case told Reuters.
Case will remain a member of AOL Time Warner's board of directors and continue as co-chair of its strategy committee, the company said in a statement.
"There is some sense of closure here that AOL shareholders will acknowledge," said SoundView Technology analyst Jordan Rohan, anticipating a slight uptick in the stock Monday.
Case is the latest casualty in a string of high-profile media executive oustings. Last summer, Vivendi Universal's Chief Executive Jean Messier and Bertelsmann's Thomas Middelhoff were also pushed out.
While some of the speculation about his fate subsided in recent months, Case was concerned it would resurface closer to the company's annual meeting in May and be a distraction.
"If it did that, it would create uncertainty and this company can't afford any distractions," Case told Reuters. "There are a lot of challenges we face. We need to focus on those, not some debate about Steve Case."
The company's America Online unit was once seen as the crown jewel of the combined business but has instead dragged down its fortunes, offsetting strength at other divisions that are home to cable networks CNN and HBO, People magazine and Madonna.
Last year U.S. officials began probes into the accounting practices of America Online. As a result of findings from an internal review, AOL Time Warner plans to restate results for a two-year period.
Some investors said Case's resignation would put the focus back on the Time Warner businesses that have been performing well.
His exit completes the departure of the triumvirate of executives credited with putting America Online and Time Warner together, which included former Chief Executive Gerald Levin and former Chief Operating Officer President Bob Pittman.
Nearly two years after the deal, much of the top management ranks are filled with Time Warner veterans who have replaced AOL executives. While some investors have advocated spinning-off America Online to completely unwind the deal, executives have said that is not being considered.
BATTLE SHAPES UP OVER REPLACEMENT
An AOL spokesman said no decision had been made about who would replace Case as chairman, adding it was a decision for the board to make at a later date. The next company board meeting is scheduled for Jan. 16.
Case recommended the board take the four months ahead of the annual meeting to decide on who, if anyone, will fill his shoes.
Ghriskey said AOL Time Warner needs outside leadership to counter threats from competitors like Microsoft Corp., which has made strides to extend its dominance of the computer software market and branch into online media, broadband networks and other AOL Time Warner businesses.
But several analysts and investors said Vice Chairman Ted Turner, who as the company's largest individual shareholder has lost billions since the deal, may be tapped for the role.
"I think Ted Turner is going to replace him. He's a loose cannon but he probably has more allies than anyone else," Kass said. "The natural (fit) would be a dual role for Parsons." (Additional reporting by Dane Hamilton and Derek Caney)
Bom dia,
The resignation, effective in May, completes the exodus of the key architects of the $106.2 billion deal, which irked investors for not delivering on its promised to supercharge growth by marrying old and new media.
"Case was clearly ineffective and I didn't see any direction coming out of the company under his leadership," said Tim Ghriskey, president of Ghriskey Capital Partners LLC, a Greenwich, Connecticut-based fund that has sold its stake in AOL Time Warner.
Case, an Internet pioneer who brought e-mail to the masses and built a start-up into the world's largest media company, told Reuters in an interview that he decided to leave so he would not be a distraction to the company.
AOL Time Warner stock has fallen 70 percent since it completed the biggest media merger in U.S. history in January 2001, suffering from the meltdown of the Internet economy, the collapse of the advertising market and federal probes of America Online's accounting practices.
Case acknowledged the blockbuster combination fell short of expectations he had when the deal was announced in January 2000.
But he defended its premise, nonetheless.
"It was a good strategic move for both companies even though I acknowledge things at this particular juncture have obviously not gone the way I or anyone else has thought it would," he said in the interview.
WEEKEND DECISION
Case, a co-founder of America Online, notified Chief Executive Richard Parsons and the board of directors of his decision over the weekend -- a day after the second anniversary of the completion of the merger that created the world's largest media company. It will be effective in May.
"Although I prefer being chairman and I'll miss not being chairman and I'm obviously disappointed by it, I still will continue to play a role," Case told Reuters.
Case will remain a member of AOL Time Warner's board of directors and continue as co-chair of its strategy committee, the company said in a statement.
"There is some sense of closure here that AOL shareholders will acknowledge," said SoundView Technology analyst Jordan Rohan, anticipating a slight uptick in the stock Monday.
Case is the latest casualty in a string of high-profile media executive oustings. Last summer, Vivendi Universal's Chief Executive Jean Messier and Bertelsmann's Thomas Middelhoff were also pushed out.
While some of the speculation about his fate subsided in recent months, Case was concerned it would resurface closer to the company's annual meeting in May and be a distraction.
"If it did that, it would create uncertainty and this company can't afford any distractions," Case told Reuters. "There are a lot of challenges we face. We need to focus on those, not some debate about Steve Case."
The company's America Online unit was once seen as the crown jewel of the combined business but has instead dragged down its fortunes, offsetting strength at other divisions that are home to cable networks CNN and HBO, People magazine and Madonna.
Last year U.S. officials began probes into the accounting practices of America Online. As a result of findings from an internal review, AOL Time Warner plans to restate results for a two-year period.
Some investors said Case's resignation would put the focus back on the Time Warner businesses that have been performing well.
His exit completes the departure of the triumvirate of executives credited with putting America Online and Time Warner together, which included former Chief Executive Gerald Levin and former Chief Operating Officer President Bob Pittman.
Nearly two years after the deal, much of the top management ranks are filled with Time Warner veterans who have replaced AOL executives. While some investors have advocated spinning-off America Online to completely unwind the deal, executives have said that is not being considered.
BATTLE SHAPES UP OVER REPLACEMENT
An AOL spokesman said no decision had been made about who would replace Case as chairman, adding it was a decision for the board to make at a later date. The next company board meeting is scheduled for Jan. 16.
Case recommended the board take the four months ahead of the annual meeting to decide on who, if anyone, will fill his shoes.
Ghriskey said AOL Time Warner needs outside leadership to counter threats from competitors like Microsoft Corp., which has made strides to extend its dominance of the computer software market and branch into online media, broadband networks and other AOL Time Warner businesses.
But several analysts and investors said Vice Chairman Ted Turner, who as the company's largest individual shareholder has lost billions since the deal, may be tapped for the role.
"I think Ted Turner is going to replace him. He's a loose cannon but he probably has more allies than anyone else," Kass said. "The natural (fit) would be a dual role for Parsons." (Additional reporting by Dane Hamilton and Derek Caney)
Bom dia,