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Perspective: Less vision, more execution, please

CNET News.com's Evan Hansen explains why disgraced Internet "visionaries" are in no short supply after staking their reputations on a conviction that digital technology is changing everything, somehow. What they didn't know has come back to haunt them.

Less vision, more execution, please.

Disgraced Internet "visionaries" are a dime a dozen these days, it seems, so shed no tears for outgoing AOL Time Warner Chairman Steve Case. In an 18-year run from start-up founder to master of the media universe, the one-time Pizza Hut employee put his stamp on business history, creating the world's largest Internet access company and buying out the world's biggest media company.

Should we credit his extraordinary vision? I don't think so. AOL's business plan was not rocket science. The company surpassed its rivals because for many years it worked harder, marketed harder and pushed harder than its many tough rivals, including Microsoft. As for the buyout, let's not forget the contribution of a certain temporary mass investor delusion, without which Case could never have courted Time Warner's then-CEO, dot-com wanna-be, Gerald Levin.

So what happened?

Like other billionaires granted enormous success in life, Case has apparently convinced himself that he is a genius whose special magic consists in seeing the play better than the other guy, rather than scrapping hard and getting some lucky breaks. Big mistake.

In announcing his departure as AOL Time Warner chairman, Case said he would continue to offer his special magic to the company as an outside director and strategy guy. In other words, he is likely to have little further impact on the company, which above all needs people who can carry the ball.

Everyone is now free to laugh at the AOL Time Warner merger, a deal brokered with wildly overvalued dot-com stock that allowed an Internet upstart to swallow the world's largest media company.

Investors have trashed the hookup as the worst idea since New Coke, wiping some $200 billion in market value from the combined company's worth since the deal was consummated. The company's accountants have admitted to a slightly more conservative fleecing, having taken a $54 billion write-off--the largest in corporate history--based on the decline in the stock price since the merger. Another write-down is expected this year that could push the total north of $64 billion.

Like other billionaires granted enormous success in life, Case has apparently convinced himself that he is a genius whose special magic consists in seeing the play better than the other guy.
In an interview on CNBC the day after the resignation announcement, Case appealed the market's verdict of the merger to history: In 10 to 15 years, he predicted, people will look back and take a different view.

He's probably wrong about the deal itself. No distance in the rear view mirror will change the fact that Time Warner sold itself for mostly worthless dot-com scrip. And no distance can obscure the seemingly willful blindness of the deal's boosters within the company, who continued to predict massive growth deep into an advertising recession of epic proportions.

Case is certainly right, of course, in noting that the Internet and digital technologies will ultimately force profound changes on a largely reluctant media industry.

Such an observation hardly requires great foresight, however.

The arguments are well-rehearsed: Networked digital technology is changing the fundamental business assumptions and relationships that form the basis of modern media companies. File-swapping, time-shifting, ad-skipping and on-demand programming are poised to give consumers unprecedented control over the ways they consume media. Companies that provide those products ignore these trends at their peril.

Unfortunately, simply believing this is the case does not lead to any immediate insights into what will work in the new digital economy or how to successfully make the switch from an old media to a new media company.

Visionaries aside, most major media companies are still fumbling to find a success formula for the Net.

Case and a handful of disgraced media executives such as former Vivendi Universal CEO Jean Paul Messier and former Bertelsmann CEO Thomas Middelhoff staked their careers and reputations on their convictions that digital technology is changing everything, somehow. What none seemed capable of doing was developing specific products and services to harness the shift profitably.

Visionaries aside, most major media companies are still fumbling to find a success formula for the Net.

At an investors conference this past fall, AOL unveiled its latest attempt to marry old media content with new media distribution, dusting off a plan that seems remarkably similar to Time Warner's failed 1994 Pathfinder venture, which aimed to repackage exclusive Time Warner content for sale online.

So much for AOL bringing the catalyst of innovation to a venerable media concern. The momentum appears to have gone the other way, as AOL's new managers bring new energy to bear on time-tested and hallowed business techniques, such as paying attention to their customers.

How visionary.