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Case puts AOL Time Warner goals on stage

Outlining a set of goals to shareholders, AOL Time Warner Chairman Steve Case stresses the need to create new products in a rapidly converging business.

NEW YORK--Outlining a set of goals to shareholders Thursday, AOL Time Warner Chairman Steve Case stressed the need to create new products in a rapidly converging business of media, entertainment and technology.

Case's speech, delivered during the company's first shareholders' meeting in the historic Apollo Theater in Harlem, emphasized that AOL Time Warner must transform the way media companies reach their customers. As more information and entertainment become distributed through new mediums, AOL Time Warner wants to be there to connect the dots, he said.

"The bad news is that the complexity and confusion of so many different devices in so many different areas also increasingly frustrates" consumers, Case said during his speech. "As always, the trick is to see to it that new technologies are easy to use, saving consumers that most precious human resource: time."

Case seemed upbeat, cracking a few sarcastic remarks with shareholders in the audience during the question and answer session. Chief Executive Gerald Levin, who shared the stage with Case during the entire meeting, assumed his commonly somber and serious presentation but joked that the duo would take the stage for the Apollo's "Amateur Night."

Levin also reiterated that the company would meet the aggressive revenue projections it made when America Online first announced its intent to purchase Time Warner. Executives expect to generate $40 billion in revenue and $11 billion in earnings before interest, tax, depreciation and amortization (EBITDA) for 2001.

Levin said the AOL unit remains the company's "crown jewel" in terms of growth and positioning in the online marketplace. The company has begun integrating its entire Internet infrastructure into AOL's network, which now hosts all Time Warner sites, including those from Time Inc., Warner Bros. Online and Turner Broadcasting. In turn, those sites are cross-promoting the Web access service.

AOL Time Warner has become the largest experiment in combining an online giant with a traditional media powerhouse that also holds an enormous library of copyrighted works. However, the combined company still has merger-related issues to work out.

AOL Time
Warner package In its annual report, the company said it expects to incur nearly $965 million in charges related to the merger. Of that total, $565 million is related to work force reductions and severance packages. Most of the remaining amount is classified as a liability in the company's balance sheet.

Still, shareholders seemed generally pleased with the executive reports. Some took issue with more minute concerns about the business such as whether CNN's reporting on the Middle East crisis was biased against Israel. Others took time--too much time, some shareholders complained--to praise the merger.