Time Warner Inc. said Steve Case resigned as a director, five years after orchestrating the failed $124 billion combination with America Online Inc.

Case, 47, said in a statement today that his resignation is effective immediately. Case, who co-founded AOL, said he will remain one of the largest shareholders of Time Warner, the world's biggest media company.

"It puts more distance between Time Warner and the horrendous deal that was made and the people who propagated it," said Hal Vogel, chief executive of New York-based Vogel Capital Inc.

The decision by Case may help alleviate some pressure on Time Warner Chief Executive Officer Richard Parsons, who is being pushed by billionaire shareholder Carl Icahn to make changes to boost the shares. Icahn this month targeted the board, saying 12 of the 15 directors voted in favor of the AOL transaction, which caused $100 billion in losses and prompted shareholder lawsuits and a Securities and Exchange Commission investigation.

"I continue to have a special pride and passion for AOL, and I strongly believe that AOL — once the leading Internet company in the world — can return to its past greatness," Case said. He said he is stepping down to spend more time on his new investment fund, Revolution LLC.

Revolution LLC owns several businesses including Wisdom Media Group, a company that makes TV programs on yoga, acupuncture and shiatsu; a high-end spa outside Tucson, Ariz., called Miraval; and Exclusive Resorts, a company that markets luxury vacation rentals.

Since the 2001 merger, Time Warner stock has lost two-thirds of its value.

Time Warner rose 8 cents yesterday to $17.83 in New York Stock Exchange trading. Shares have fallen 8.3 percent this year.

Bloomberg News Service and The Associated Press contributed to this report.