Steve Case resigns from Time Warner board
A driving force behind the failed AOL-Time Warner merger steps down. But he still owns lots of stock in the company.
Case, who had been one of the main architects of the disastrous merger between AOL and Time Warner, stepped down from his post as chairman of the board in 2003. Since then, he has served as a board member for the company, despite protests from shareholders, who were angered by the sharp dip in the company's value after the merger was completed.
Steve Case
Co-founder, AOL
As one of the largest Time Warner shareholders, Case will likely still be involved with the company. But he is also moving on to other ventures. In April he launched an investment company called Revolution that makes investments in health care and media companies as well as resorts and wellness centers.
"On behalf of Time Warner's board of directors and senior management team, I thank Steve Case for his years of distinguished service to our company," Dick Parsons, Time Warner's chief executive officer, said in a statement. "We have great respect for his long record of achievement--as a co-founder of AOL to a valuable member of our board. As Steve is one of our major individual shareholders, we'll look forward to his wise counsel as the company continues to move forward. He will be missed."
The multibillion-dollar merger between AOL and media conglomerate Time Warner came at the height of the Internet boom. When the deal was announced in January of 2000 it was valued at about $350 billion. Two years later, the combined company had lost a sizable portion of that market value. The company also was investigated by the Securities and Exchange Commission and Department of Justice, which questioned the company's accounting leading up to the merger. Angry shareholders filed lawsuits, which ended up costing the company billions of dollars.
Earlier this year, Case pointed the finger at himself for much of the trouble that undermined the megamerger. "In retrospect, I probably wasn't the right guy to be the chairman of a company with 90,000 employees," Case said at a January event at the Computer Science Museum in San Jose, Calif.
The AOL name had gotten so muddied by 2003 the board of directors decided to remove it from the name of the company. But now after years of languishing inside Time Warner, AOL appears to be hot again. Google and Comcast are in serious talks to buy a minority stake in the division, according to sources familiar with the matter.
As subscriber rates for its dial-up service rapidly decline, AOL is trying to transform from an Internet service provider and portal with subscriber-only access to an open, online media property looking to cash in on the Net advertising boom. In August it launched a new portal that will make services and content that were previously available only to AOL subscribers free to everyone. The company is also spending more than $50 million on a marketing campaign to promote its new strategy.
Despite its many problems through the years, AOL is still an important brand name when it comes to the consumer Internet. According to research firm Nielsen/NetRatings, AOL reaches roughly 49 percent of the Internet population, or about 72.5 million people monthly. In contrast, Yahoo reaches 67 percent of the population, or 99 million people monthly. Microsoft draws 61 percent, or 91 million people. And Google pulls in 53 percent, or 79 million.