Fog Creek Software
Discussion Board

What do you guys make of Case resigning as CEO?

Do you think he was fairly or unfairly blamed for AOL's problems following the merger with Time Warner?

Monday, January 13, 2003

Even during the Internet hey-day, was there ever a real, legitimate, rational reason why AOL and Time-Warner should have merged?  It all seemed like a bunch of wishful thinking, even at the time.

J. D. Trollinger
Monday, January 13, 2003

Steve Case did very well for AOL.  Not too sure if I could say the same about Time Warner.

Bob Greene
Monday, January 13, 2003

I find it bizarre that he has been nowhere to be found post-merger. This is the guy who was supposed to figure out how to bring TW into the digital age and turn AOL into a new age media outlet.

Monday, January 13, 2003

Somewhere, I think it wast TIME magazine (owned, of course by TW) where AOL expected to charge customers $150/month in fees.  Wireless services, TV guide services, messaging, blah, blah...  A pipe dream.

But AOL is not the only one thinking along these lines - ATT (Armstrong/Malone) had the same idea: expecting to be able to charge consumers each time they printed from the "walled garden" for example.

Who knows what these people are smoking.  I wonder if it has been so long since they have been on a budget of the typical middle class family that they think money really grows on trees.  Bizarre.  And educated, supposedly well informed people bought the story.

Nat Ersoz
Monday, January 13, 2003

I think the merger should have been successful if not for the poor execution of the merger.  They should've spent more time planning how things would work out after they combined forces before rushing to do it. 

Rushing headfirst into things just to be first isn't always the best strategy.  That "mindshare is marketshare" or however that thing goes has only succeeded in wasting lots of VC and other financial backing money.  It's usually better to let one or two get in and make mistakes, so that you can learn from those mistakes and correct yourself before you reach that point.

But back to the original poster's question... I think Steve Case's resignation isn't really called for and I don't think he's fully responsible.  Although, he is somewhat a large part of the initial problem due to the lack of planning and foresight him and the rest of the board members of the two companies had in preventing this disaster.

The investors wanted someone to take responsibility and the board members needed a scapegoat.  Steve Case was that -- only he isn't truly guilt free of the problems the two companies are having.

Tuesday, January 14, 2003

It boils down to execution. Look at the "merger" (I have no idea why buyouts are called mergers!) of HP & Compaq, that was executed really well.

I am not sure but I think it was SSMB who represented HP, and Goldman represented Compaq.

As the saying goes "Proper Planning prevents PISS POOR Performace"

Prakash S
Tuesday, January 14, 2003

I'm not sure we know how well the merger of Compaq and HP has gone. Give it a few years then we'll have a clearer picture. Of course they're going to be positive about it and declare how wonderful it's gone - only time will tell.

Very few large scale mergers deliver long term shareholder value - I often wonder if these mergers' aren't more about executives spending their time on more exciting things than the day-to-day humdrum. 'What shall I do do today? figure out how to eek out a further 1% savings from procurement or plan to do a massive merger which will involve lots of intense debate and battles'. um.

Anyway, cost savings are nearly always overestimated in large scale mergers and the difficulties of mixing cultures is nearly always underestimated IMHO.

Tuesday, January 14, 2003

I think the merger of HP and Compaq will ultimately ruin the company.  The product lines are exactly the same.  So they combine and are what?  Bigger?  Dell was kicking their butts in sales, now HP is just larger and less nimble.  They will get kicked worse now.  I believe the people that opposed the merger were correct in that it will ruin the company.

HP is a company without a clue.  Kind of like the mellon truck analogy.  "I'm losing 25 cents every mellon I sell, the only way I'll break even is to get a bigger truck."

Crusty Admin
Tuesday, January 14, 2003

To be fair to Case, I think he did what was best for the AOL shareholders.

I think they would have been hit a lot harder had they not merged (Yahoo! anyone?). He used his very expensive paper to buy some real cash/assets.

I think ebay did something similar, issuing a couple of billion in a rights issue somewhere near the top of the boom. Despite the fall in share prices, that two billion cash is still two billion.

The biggest losers(idiots?) were those who parted with cold hard cash for dot com at the top of the mountain.

Tuesday, January 14, 2003

TW Execs are so embarrased about what THEY did that their egos require a scapegoat solution to deflect the spotlight from THEIR idiocy.

Steve was just doing what antone should have donoe with that valuation.

Tuesday, January 14, 2003

The AOL Time-Warner merger was old style corporate thinking, you have to get bigger all the while, ownership is the goal.  Ownership of the market, ownership of the chain of production, ownership of the lateral markets.

As for Compaq and HP, we don't even know if Compaq and DEC worked really, the hunch is that it didn't.

Simon Lucy
Wednesday, January 15, 2003

Taking the money and running.

The AOL Time Warner merger is a very slick con game by Case.  He's traded an Internet Bubble company (AOL) for shares in a real company (Time Warner).  Now he's cashing up and rolling naked in money.

Ooops, cynical me...

Rodger Donaldson
Thursday, January 16, 2003

*  Recent Topics

*  Fog Creek Home