Time Warner CEO likely to be chairman by Hawai'i visit

By Sean Hao
Advertiser Staff Writer

Richard Parsons Title: AOL Time Warner Inc. CEO Age: 55 Past jobs: Dime Bank Corp. chairman, CEO; Norman Rockefeller counsel; senior White House aide under Gerald Ford. Education: University of Hawai'i; Union University's Albany Law School in Albany, N.Y.

"It was kind of a lark. I had a case of wanderlust," said Parsons in a phone interview yesterday.

This weekend Parson will visit O'ahu with a more serious purpose: sending off UH graduates into a world that is vastly changed in the past four years.

Parsons, who attended UH from 1964 to 1968 but did not graduate, will give the commencement address at 9 a.m. Sunday at the Stan Sheriff Center.

He said graduates today enter an economy that has flirted with recession for three years, a technology industry that has gone from boom to bust and a world forever changed by the Sept. 11, 2001 terrorist attacks.

"This is a very different time that they're graduating into than they might have thought when they started their education four years ago," Parsons said. "But times like these make for great generations and challenges."

Parsons knows about great challenges first-hand. Last year he succeeded Gerald Levin as CEO of the troubled media conglomerate that was assembled during the peak of the Internet bubble. On Friday, he'll likely face the wrath of shareholders who have seen the company's stock shrink from about $70 at the time of the AOL and Time Warner merger to about $13 today.

AOL Time Warner also faces scrutiny by the Securities and Exchange Commission over the company's accounting practices.

Despite the challenges, Parsons is expected to emerge from the meeting with the added title of chairman as Steve Case, a Punahou graduate and AOL founder, steps aside.

Parsons, who met his wife Laura at UH, said his affection for Hawai'i remains strong. He said he's been back about half a dozen times and is familiar with the state's economic problems, which stem from a weakened Japanese economy and global slowdown in tourism.

"The state has been really, well, not devested, but in a recession for eight to 10 years now," Parsons said. The way to grow and diversify Hawai'i's economy is by building a technology industry, he said.

While Hawai'i's geographic isolation remains a barrier to certain businesses, it also positions the state to capitalize on East-West trade and growing economies in the East, Parsons said.

"Secondly, it's just a damn beautiful place," Parsons said of Hawai'i. "Who wouldn't want to live there?"

Like many companies with ties to technology AOL Time Warner's once-bright prospects were deflated when the Internet bubble burst. The company lost $98 billion last year after failing to capitalize on expected synergies between Time Warner's entertainment properties and AOL's online audience.

Yet despite three-plus years of carnage in the technology, Internet and telecommunications industries, Parsons forecasts an improving job market for UH graduates. AOL Time Warner's prospects also appear to be increasing, too — the New York-based company posted higher sales and profits in the first quarter.

"The older you get the more you find out everything in life is cyclical," he said. "I think we've kind of bottomed out. So I think that things are going to get better."

However, Parsons doubts whether any one new application or service will spur the next Internet boom. Instead, it will be a steady progression of new things to do on the Internet that will drive people to log online more. He pointed to new services such as Apple Computer Inc.'s just-launched online music store.

Eventually, broadband Internet service will be as ubiquitous as the television, a 1927 invention that took decades to take hold as a staple in American households, Parsons said.

"I think broadband is going to follow the same kind of track, just a little more quickly," he said.