The AOL Time Warner President Steve Case Announced His Resignation

Steve Case (44) announced on the 12th that he would resign the president position of the America Online Time Warner on May. President Case, who was the co-founder of an Internet service provider, AOL, is the one who bought the big media tycoon the Time Warner, which had 4 times more sales than AOL, on January 2000 right before the dot-com bubble vanished, and opened the era of new media and old media combined.

Due to his resignation, the management of the AOL Time Warner will be completely controlled by the old media, Time Warner in two years. It is predicted that the current CEO Richard Parsons from Time Warner will succeed the president position.

President Casey said, “Considering some stock owners continuously showing their personal disappointment about the business showings after the merge to me, I made decision to do a necessary action.”

The AOL Time Warner has been afflicted with veiled enmity around the right of management in two years after the merge instead of the synergy effect of new and old media combined. The right hand man of president Case already resigned from his COO position on last July, and the pressure of resignation was centered to president Casey after the business manager of AOL David Colburn`s leaving the company.

The vice-president Ted Turner, the president of the affiliated company Liverter Media John Malone, and a large stockowner Gordon Crawford, who has 10% of stocks, have been trying to expel him. The vice-president made a statement saying, “I respect president Case`s resignation.”

The head-to-head collision of cultures of two companies was another reason for complication. It was not easy to harmonize an online company, which put more emphasis on technology and put growth ahead than profit, with an offline company, which put more emphasis on contents and put stability ahead than growth.

And more than that, the aggravation of profits of AOL made AOL officers` leeway small. The total sales of AOL Time Warner last year were increased to 8.8 billion ~ 9 billion, so it was little better than 8.7 billion of the past year; however, the advertisement and business sales of AOL were just 1.5 ~ 1.6 billion dollars, so it was largely decreased than 2.7 billion dollars of 2001. Therefore, the stock price, which was 56 dollars per share right after the merge, has been dropped to 14 dollars.

On top of that, since the investigation of the Justice Department on the unclear accounting of AOL around the merge was started in full scale, a suspicion that the Time Warner was cheated by AOL`s `trick` and merged with them is being raised

With all these cases were piled up, although he could maintain his position unless an objection of three fourth of the board of directors, he resigned by himself. He still keeps his position in the board and co-president of the company strategy committee.

Eun-Taek Hong euntack@donga.com