Time Warner and AOL: When Harry met Sullied

Sometimes, a CNET handler gives me homework. "Read this, you slovenly, ill-dressed, strangely smelling artist type," they say, "and learn something."

So I have spent the past many hours of my life looking at the wedding scrapbook of Time Warner and AOL. A marriage made where Vegas feared to tread. A marriage in which what happened there didn't, unfortunately, stay there.

I open the scrapbook on January 10, 2000. I read phrases like "stunning announcement."

I read that an analyst called Phil Leigh says this is the most significant development in the Internet world to date. I receive a lesson: "If it hasn't been evident to most of us yet, it should be obvious to us now that the Internet is about audio and video and not just merely text and graphics."

Leigh then informs me: "I think AOL is in the driver's seat." What car are we in, I wonder. A Pontiac, perhaps.

I turn the page and stare at quite hyperbolic hyperbole. This is Charles and Diana. This is Sarkozy and Bruni. This is Dennis Rodman and Carmen Electra: "Merger drops a bomb on Microsoft"; "How AOL became a superpower"; and the quite prophetic, "Is AOL still a Net company?"

I already want the happy couple to move into a big house, with dogs and cats and lots of babies. I want them to adopt some of those babies from far-off lands. I want them to make movies together.

It takes a year for the rather overbearing parents at the FTC to give the marriage their blessing. So the happy couple skip into the moonlight. Even the chap with the slightly Trekkie eyes from AOL seems joyous.

But just a month later, January 12, 2001, word slips out from the new Georgian mansion that stormy weather may buffet the freshly sailed love boat.

The world is mired in a depression that no amount of Xanax can assuage. Big love may be shadowed by big problems.

After all, Time Warner which already has a lot of children, needs to be able to have relationships with other people to give those children the fullest possible opportunity to become successes.

While AOL needs to adopt puppies from many other places to provide the fun and games that its customers and markets desperately need.

As some CNET seers put it at the time: "It is doubtful that long-term advantage exists for AOL to own content or cable. Similarly, Time Warner will not find enough efficiencies in being part of AOL or owning its own cable."

This is January 2001 and paradise is already troubled. Simultaneously, various executives are promoted to head little fiefdoms that will hopefully all, um, make money and not annoy each other. The people in charge seem largely to be AOL people.

A couple of weeks later, and we're still in January 2001, untrammeled joy fills the skies. Earnings of the new marriage are beyond expectations. Perhaps even those of Phil Leigh.

Yet a CNET seer declares, almost as if he knows the ending: "So far, the good news is there isn't any bad news."

I turn the page excitedly. Two months later, the married couple tries to distance itself from a friend whose life has begun to sag. That friend is Yahoo.

And by the end of 2001, the Time Warner man at the heart of the merger, Gerald Levin, decides that perhaps it's time to leave the happy couple to its own devices, although some can't help but be suspicious that he knows something about those AOL chaps. And it may not be something good.

A member of CNET's crystal-balling team declares: "Levin leaves before proving the value of a merger that could become the measure of his career. The executive sold the world's largest media company and copyright holder to an Internet company barely 15 years old. Some industry insiders say the combined company would be named Time Warner AOL if the deal were struck today."

Just a month later, January 9, 2002, and it begins to read like a National Enquirer exclusive. Those AOL chaps might not have been quite such eligible suitors.

Two CNET wise men write: "In a sense, AOL has gone from jewel to stone in AOL Time Warner's crown." Earnings are down. AOL's behavior is suddenly described as defensive. All its supposed internetty wisdom seems to evaporate like a fifth-placed contestant on "American Idol."

A month after this, AOL's broadband plans seem to lack breadth. In July 2002, AOL's larger brains begin to leave. Corner offices are suddenly rejiggered into Time Warnered offices.

By September 2002, the self-styled visionary with icy eyes, Steve Case, had the world on his case. Was it all his fault? Does anyone care?

By the end of 2002, the talk is of revamping. This isn't even couples therapy. This is separate beds, woolen pajamas, and no cocoa.

As I lick my finger to turn the page again, I fear tears may soon form in my eyes. We are now in March 2003 and the operative word is "shambles." Some blame a bursting Internet bubble. Others suggest there is little room for long-term thinking in the short-term environment of a public company. A few suggest only fools go after fool's gold.

In the same month, Time Warner tries to pinch AOL into life by giving it exclusive content. But in April 2003, it appears that people aren't in love with AOL. Which means advertisers won't be either.

By August 2003, there is talk of losing the AOL part in the company name.

And, just as People magazine always knows that Angelina is pregnant before you do, the AOL disappears in September 2003.

Worse, in what was supposed to be the ultimate modern marriage, it is the old-fashioned partner, Time Warner, that is still making the money, while the company of the future looks like just another loser dot com that shops at the Emperor's nudie store.

This is 2004. By 2005, there is talk of permanent separation.

The rest just seems all too familiar. By 2008, there is more speculation as to what might happen to the forlorn AOL. Might Microsoft marry it? Might Yahoo? Or might different parts of AOL be chopped up like a sad, retired racehorse?

Which proves to be the, um, case in August 2008.

As we drift into 2009, the acronym AOL represents, for many, Any Old Loser.

As I close the scrapbook and wipe the dust from my glasses, what I have learned from my homework is that you cannot build a relationship, business or personal, on Anything Other than Like. At least, a little Like.

Because in a merger as large and hopeful as this one, one in which both parties expect to hang around and benefit from the new arrangement, the most crucial element is the relationship and understanding between the people making the deal.

The lessons of this cumbersome coupling seem to be:
1. Don't marry anyone just for the money. It might not actually be there.
2. You actually have to like the person you're marrying. Because in the dark times, the fact that you like them will help you work things out.
And 3. Just because it's new doesn't mean it's good.