AOL Time Warner chairman Case will likely remain, but assume less-active role
By Kim Chipman
Bloomberg News Service
NEW YORK — Steve Case, chairman of AOL Time Warner Inc., said he expects to stay at the company, though in a less-active role now that he's helped create a plan to revive growth at America Online, the largest Internet service.
The new strategy, announced to investors earlier this week, includes adding more exclusive content to America Online and offering a new high-speed Internet product. The company also said the unit's advertising sales will fall as much as 50 percent next year.
The reduced forecast, along with ongoing federal investigations into America Online's accounting, might lead the company to oust Case, some investors have said. Case orchestrated America Online's 2001 purchase of Time Warner Inc. The shares have fallen 71 percent since the acquisition. Still, some shareholders said they want Case to stay.
"He's smarter than 99.9 percent of the people in this country," said Morris Mark, general partner of Mark Asset Management, which owned 1.5 million AOL Time Warner shares as of September. "I want a smart person working for me."
Of the three top executives who oversaw America Online's purchase of Time Warner, Case is the only one left. Gerald Levin, former AOL Time Warner chief executive officer who had been head of Time Warner; and Robert Pittman, former America Online CEO, both left the company earlier this year.
"Case is a reminder of who created all these problems," said Harold Vogel, an independent media analyst and head of Vogel Capital Inc. "If he were lower down in the organization, he would have been forced out immediately."
The Honolulu-born Case will be up for re-election as chairman at the company's annual meeting in May. Through next year, 75 percent of AOL Time Warner's board must agree to remove Case. After 2003, only a simple majority vote is needed to remove him, the company said.
The 44-year-old Case, who initially didn't involve himself in daily operations, became more active this year as the company moved to turn around America Online's declining profit and ad sales. Case said he now expects to return to his role as the company's strategic overseer and leader of the board.
"I'm happy to be helpful, but they now have a plan" for America Online, Case said. "They've considered all the alternatives. We've had some pretty vigorous debates about things."
He didn't elaborate on what other options were considered.
In response to the reduced forecasts at America Online and other financial issues facing the company, Standard & Poor's repeated its negative outlook on AOL Time Warner's long-term corporate credit rating.
