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Case's brilliant strategy

In response to the January 14 Perspectives column by Evan Hansen, "Less vision, more execution":

I think there is another interpretation to the AOL-Time Warner "merger" that no one has written about, although you touch on the relevant facts.

Scenario: AOL Chairman Steve Case, a smart guy who's built, almost lost and then turned around his business, sees it again valued at a huge number. Since he's smart and been thrashed once by the market, he knows he has to do something to take some risk off the table. He knows MSN is going to eventually come after him, and no one in their right mind looks forward to going head to head with Microsoft.

So he takes his highly inflated stock and decides to buy something that is real. General Motors and Ford don't make sense so he eventually settles on Time-Warner. How do you make it come about? Well, a hostile merger is one way, but it's easier to come up with a fantasy about synergy and get everyone on both sides of the table to sing out of that hymnal. If the press buys it, so much the better.

Did he believe all those words? Who knows? Impossible to tell, and he'd never admit the truth, since it would open him to lawsuits for the rest of his life. Plus, it's been my experience that really good salesmen often do come to believe the story they are telling anyway.

I think AOL pulled off one of the great scams of all time. Did the combined stock go down? Yes, but a lot less than an independent AOL would have--so they were able to take millions and put them in their own pockets. Brilliant, in my book.

How will it turn out ? AOL will be spun out and/or sold to Microsoft. Time-Warner will be back where it was a few years earlier, and the AOL stockholders will be a lot richer than they would have been if the company had stayed on its own. Like I said--brilliant.

Mike Corder
Aptos, Calif.