[ STEVE CASE STEPS DOWN ]
ASSOCIATED PRESS
AOL Time Warner Chairman Steve Case said he will still make the company a top priority even after his resignation.
What’s next NEW YORK >> He took a big financial hit in stocks. He's about to be out of a job. But don't count Steve Case out just yet.
for Case?
His future is likely a visible one,
AOL now slipping behind the times
despite his AOL resignation
By Lisa Singhania
Associated PressTrue, the outgoing AOL Time Warner chairman's aura as an Internet visionary is a lot dimmer these days, and after May he won't have an executive office. But he's pledged to stay involved in efforts to fix the mess at America Online, and should that fail to work out, still has enough pocket change to indulge any new business ideas.
"He's very entrepreneurial and has been with AOL right from the beginning. He likes to start and build companies and now he's worth an awful lot of money and has a lot of capital behind him," said Andrew Ward, a professor at Emory University's Goizueta Business School.
"I'd see him getting involved in new ventures, new tech ventures," Ward said. "He would not necessarily be running those companies, but investing and providing guidance to young companies, more like an angel investor."
(Case was born and raised in Hawaii, and graduated from Punahou School. He is the son of attorney Dan Case, and the owner of Grove Farm Co., as well as a major shareholder in Maui Land & Pineapple Co.)
Just hours after announcing his plans to resign, Case was busy making the rounds of the broadcast news programs yesterday, discussing his decision and defending the 2001 merger of America Online and Time Warner that ultimately led to his downfall.
He said he will continue to make AOL Time Warner a top priority even when his May resignation takes effect and his only affiliation with the company is as a member of the board of directors.
"There is still work to be done and I'm not going to run away," he told CNBC.
Despite the bravado, most analysts doubt Case will have much of a role at AOL Time Warner beyond May.
"I expect he'll keep a low profile at AOL Time Warner for the same reasons that he stepped down. At least publicly, he's a figure that reminds the Time Warner people and their shareholders of the mistake they made," said David Smith, an analyst at Gartner Inc., a technology research and advisory firm.
Initially hailed as a business revolutionary for brokering the 2001 deal that combined his America Online with the venerable Time Warner, Case's reputation and personal fortune have suffered as Wall Street second-guesses the merger amid questions about America Online's business model and accounting practices.
Investors blamed him for the huge decline -- about 80 percent -- in value of AOL Time Warner shares in the three years since the merger was first proposed.
One career path for him might be philanthropy. Case helped found a brain cancer research charity with his brother Dan, who later died of brain cancer in June 2002. He also started the Case Foundation.
Case still carries weight in many parts of the business world and wouldn't have too much trouble marketing his expertise. His America Online is widely credited with making the Internet, e-mail and Web surfing part of Americans' vocabulary.
"He had a vision for combining ease of use with information services that, until America Online, had been almost exclusive provision of nerds, geeks and technophiles," said Shane Greenstein, a professor at Northwestern's Kellogg School of Management. "He got praise for being a marketing genius and he deserved it."
He also did right by his America Online shareholders, leveraging the company's mile-high stock price during the Internet boom to acquire assets in Time Warner.
BACK TO TOP |
NEW YORK >> Long before the departure of Steve Case, it was clear America Online had fallen behind the times. AOL now slipping
behind the times
By Jim Krane
Associated PressWith rivals moving from dial-up to high-speed access, AOL remains king of a stagnant and increasingly low-tech empire of phone users.
"We have to ask, 'Can they go forward?"' said Jakob Nielsen, principal of Nielsen Norman Group, an Internet think tank. "They have to come up with something new."
Analysts say AOL will begin to lose its 35 million subscribers without ingenuity and a painful push that takes them away from profitable but increasingly outmoded dial-up subscriptions.
According to Jupiter Research, revenue from broadband Internet subscriptions will surpass those of dial-up by 2004. AOL currently owns about a third of U.S. dial-up accounts, but just one in 30 broadband subscriptions, Jupiter said.
"This is a classic case of someone being on top of the hill and not seeing the horizon," Forrester Research's Chris Charron said. "AOL developed a killer app for dial-up. They never developed a killer interface for the broadband environment."
As AOL fumbles, competitors are forging ahead with new technology.
Yahoo! Inc. announced Sunday that it will let users of its online dating service submit video clips. Amazon.com is increasingly morphing into an online store for consumer electronics goodies.
And last week, There Inc. introduced an online universe in which participants will assume cartoon-like characters that many believe trumps the chat rooms and message boards at AOL.
Worse, perhaps, is the fact that AOL loses its last booster in the corporate office when Case steps down in May.
The division's fate then rests solely in the hands of old-line media executives from Time Warner. Some of those executives are thought to be stewing over a company that, from their perspective, was laid low by the merger with AOL.
"That doesn't bode well for AOL," Nielsen said.
With AOL expected to be tied for third place in 2003 revenues among Time Warner's six divisions, the corporation's moguls might not be in the mood to lavish it with funds and attention.
"From the corporate Time Warner perspective, that could become their decision -- sit back and cash in your monthly subscriptions and not do much innovation," Nielsen said.
AOL Time Warner
