Top > Business > 2006 > July > 2006-07-26

AOL Founder Says Time Warner Merger Was a Mistake

Anyone who opens up the CNN news website, or many other sites, when reading a story involving Time Warner (or rather, AOL Time Warner), is bound at one time or another to see ?AOL Time Warner is a parent company of CNN? or something else to that effect. This name dropping is entirely unnecessary according to the opinions of many people, but that doesn?t mean it?s going to stop. But now, the story is not so much the name-association game played by such companies, but rather that merging one company with another in the manner that America Online and Time Warner were merged might have been a mistake.

One of the many reasons Case is now regretting the decision to merge is that the event led to the loss of nearly $200 billion in the shareholder?s value in AOL. Speaking to a U.S. journalist recently and talking about his being pushed aside in 2003 and leaving the board of AOL Time Warner in 2005, Case said bluntly, ?Yes, I`m sorry I did it.?

There was a time when AOL, as America Online is known for short, was nearly ubiquitous in the internet connection service market. CompuServe and other companies were the upstarts, but AOL always seemed to be a bit ahead. And this ability to be ahead, and stay ahead, is partly what led Case to oversee the merger of AOL with Time Warner in 2001. Then, it was a good idea. Today, Steve Case, co-founder of America Online, says, ?I`m disappointed and frustrated that it hasn`t developed in the way that we all hoped at the time it could.?