Stealing Time Steve Case Jerry Levin & T

by Alec Klein

In January 2000, America Online and Time Warner announced the largest merger in U.S. history, a deal that would create the biggest media company in the world. It was celebrated as the marriage of new media and old media, a potent combination of the nation's No. 1 Internet company and the country's leading entertainment giant, the owner of such internationally renowned brands as Warner Bros., HBO, CNN, and Time magazine.But only three years later, nearly all the top executives behind the merger had resigned, the company had lost tens of billions of dollars in market value, and the U.S. government had begun two investigations into its business dealings.How did the deal of the century become an epic disaster?Alec Klein has covered AOL Time Warner for The Washington Post since the merger. His reporting on the company led to investigations by the Justice Department and the Securities and Exchange Commission. In Stealing Time, he takes readers behind the scenes to show how a clash of cultures set the stage for a spectacular corporate collapse. AOL's Steve Case knew it was only a matter of time before the Internet bubble of the late 1990s would burst, grounding his high-flying company. His Buy another company to keep his own aloft. Meanwhile, Time Warner's Jerry Levin was enamored of new technology but frustrated by his inability to push his far-flung media empire into the Internet age. AOL and Time Warner seemed like a perfect match.But the government forced the two companies to make concessions, and during the yearlong negotiations technology stocks tumbled. AOL executives lorded it over their Time Warner counterparts, who felt they were being acquired by brash, young interlopers with inflated dollars. The AOL way was fast, loose, and aggressive, and Time Warner executives -- schooled in more genteel business practices -- rebelled. In the midst of clashing cultures and conflicting management styles, AOL's business slowed and then stalled. Worse yet, AOL came under government scrutiny, and when the company conducted its own internal investigation, it admitted that it had improperly booked at least $190 million in revenue. The Time Warner rebellion gathered momentum.This is a riveting story of ambition, hubris, and greed set amid the boom-and-bust years of the technology bubble. It is filled with outsized personalities -- Steve Case, Jerry Levin, Bob Pittman, Ted Turner, and many more. Based on hundreds of confidential company documents and interviews with key players in this unfolding drama, Stealing Time is a fascinating tale of the swift rise and even swifter fall of AOL Time Warner.

Genres: Business, Nonfiction, History

Unknown Binding

First published January 1, 2003

About the author

Alec Klein is an award-winning reporter at The Washington Post. His previous book, Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner, was a national bestseller that The New York Times called "a compelling parable of greed and power and hubris." He lives in Washington, D.C., with his wife and daughter.

Reviews

[Jay Rain · Rating 4 out of 5]

Rating - 8.2

Learned a lot from this book, ranging from people (Case, Levin) to the general deceit and mismanagement of AOL - The sales tactics were very suspect and eventually the house of cards fell

Appreciation for mergers and the different cultures, but particularly the synergies that can be created from different media - Horizontal alignment of product lines

Interesting Thoughts
Internet was born out of sexual imagery and sexual chat - allowed the shy people of the world to live out their fantasies

Would you rather be a big fish in a small pond, or a small fish in a big pond?

Case was brought on to AOL as a favor to his brother, an investment banker - he is not the founder of AOL

Case knew how to package the product and how to develop the strategy - never a strong operations man

Had a targeted enemy in the big bad Microsoft - the rejection by AOL is greatly exaggerated

Levin negotiated the merger in secret - Time-Warner never learned from the last merger and how culture clash can end all dreams

Levin’s claim to fame is the creation of HBO - Pittman was the creator of MTV

Rather than double down its bet on the Internet, AOL wanted to diversify and move away from the short term bull

Time Warner was targeted as a process of elimination although there was potential synergy - final breakdown was AOL 55%, TW 45%

AOL had inflated market capitalization which allowed the takeover
Shuffling of the key positions went mostly to the AOL staff
AOL erred in its assessment on how the government would react to the merger - their braggadocio attitude only made things worse

Piece de resistance was IM - much backlash that AOL would have a monopoly in the market

Business Affairs - headed by Jim Colburn - negotiated advertising deals by strong-arming naïve start-ups and milking every penny

Many contracts could not be lived up to when the floor started falling out

Had to keep the stock price and revenue targets or else investors would drop AOL like a hot potato – treated a lot of bartered contracts as advertising revenue

AOL had a stinking rich attitude - too many people got too rich, too fast of stock options

A large amount of sexual misconduct took place in the top offices - but the stock options kept the silence

Sides were very different - AOL was maverick. TW was conservative

Dogs.com - placed ads on AOL without a contract to force the company to sign a business deal
Lied to investors to maintain merger compliance image

SEC raised questions on how AOL was structuring deals

Bush was involved in the passing of the merger
Jerry Levin only looked out for himself in the merger
Case, Levin, and Pittman were all forced out
Stock price plummeted
Levin was ousted by Ted Turner who he tried to minimize during the merger

AOL programmers helped start up gnutella - a piracy website

Time Warner could not by into the synergy arrangement - each unit tried to make profits off each other

Even though there is public humiliation each ousted had a golden parachute

This could have worked - all the synergy was there, culture and communication killed what should have been

[Peter · Rating 2 out of 5]

Never finished....somehow I just lost interest

[Andrew · Rating 4 out of 5]

Solid insight into a fantastical situation, providing perceptive on the downturn of the internet industry, a clash of two very strong company cultures & most importantly the legal precedings in America regarding mergers.
Additionally, providing perceptive on the Wild West ways of the booming internet company that was AOL.

[Jay Phillippi · Rating 4 out of 5]

Clear and compelling telling of the biggest corporate merger of all time (at the time) and the excesses of the dot com boom that doomed it. AOL was a con game that was never going to last, but at its height it bought one of the great media companies of the day. Great storytelling leads you through the tangled web.

[Au Yong Chee Tuck · Rating 4 out of 5]

The largest merger in the US (at that time) was announced in January 2000 when America Online would merge with Time Warner. This merger would create the biggest media company in the world. It was also touted as the mixture of the old media (print) and the new media (the internet).

Instead, within three short years, the merger had all but unraveled. The new company lost its top executives who resigned and it lost tens of billion dollars when the share price plunged. These developments brought about federal investigations by the US government into the business dealings.

The fact that this merger failed should have been sobering. After all, it was the merger between two American companies. There should have been no cultural clash, unlike say, the merger between Daimler and Chrysler.

Such an anti-climax would provide enough fodder for any business journalist to write about. Alec Klein has avoided the temptation to sensationalize the material. Instead, he has given his readers a largely balanced view about the multi-billion marriage that turned sour so soon.

A recommended read for those who are involved in mergers and acquisitions. The book is well written and will also appeal to the general reader interested in business and management.

[Monzenn · Rating 4 out of 5]

Good corporate history of probably the height of the Internet boom of the late 90s to early 2000s. A lot do say that the AOL-Time Warner merger turned out to be the death knell to the craze which also had Pets.com as well as Amazon and Google. Stealing Time is both broad-strokes economic history and a specific tale of a merger that may have not been so good - and with the benefit of hindsight, resulted in resplitting anyway.

[Mike · Rating 3 out of 5]

I work a number of guys who used to work with AOL. They tell a story of a great company that hit a wall when the merger went through. AOL may well have been running on empty but most of the frontline people loved it and put their hearts into it. They still speak of AOL fondly.

[Fred Arshoff · Rating 4 out of 5]

very informative