Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner

A very easy read about a large event in financial history. This book is engaging enough to appeal to veterans of the financial industry but written comprehensively enough to appeal to those not as familiar. It is not fraught with jargon nor does it assume prior knowledge. The author lays out the context of the tech bubble prior to delving into this particular merger and subsequent blow-up. If you do not know the story of AOL Time-Warner, it is fascinating and perfectly laid out in this book.Even if you do, this book offers a great look into the characters involved, specific issues that arose, and provides a seamless transition from start to finish. I highly recommend this.

The book has many insights about what took place at AOL. It is an exposure of the corruption and mismanagement of a business purely for profit forgetting the public, investors and companies purchasing the product.

A review of Simon Schuster's new book, "Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner," by Alec KleinFirst, I must issue the following disclaimer: I am the "aging flower child" in Mr. Klein's new book, entitled "Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner." That said, I think that my perspective as a spokesman for a small ISP from the Midwest allows me an overview unlike anyone else discussed in the book.Overall, "Stealing Time" has established a standard for reporting on AOL and the AOL Time Warner merger that will be hard to top. If Mr. Klein's original reporting on AOL and the merger is the first draft of history, then his new book represents a first-rate second draft. No other reporter I know has had access to more sources and actors in the AOL Time Warner drama than Mr. Klein. His coverage of the early days of Steve Case and the company that would become AOL was particularly informative for the general readership.Besides the use of impressionism, the narrative achieves a terseness and non-linear quality that does much to engage the reader. At each stage, one has to reflect on the individual anecdote and where it fits into the historical process of the current state of AOL Time Warner's evolution.Another strength of the book is the author's ability to provide well-rounded caricatures of all the various players, large and small, who peopled this technological passion play. In particular, I was captivated by the chapter entitled "AOL Versus the World," and not just because I am part of it. The cast of characters described includes the usual suspects for any large merger: dueling CEO's, a panoply of PR types, a motley collection of merger opponents, consumer groups representing various constituencies, large government agencies like the FTC and the FCC, Capitol Hill denizens, the national media, and the American public. Mr. Klein captured it all with an accuracy I can vouch for.From the beginning of October 2000 to the merger approval on January 11, 2001, the whole notion of inevitability was brushed aside by the revelation that both companies, AOL and Time Warner, were telling the politicians and regulators a half-truth about their plans to allow other ISP's access to their cable's high speed Internet product.Ultimately, the Term Sheet being sent to ISP's like Earthlink and other applicants was a contract no one could ever sign. It's anti-competitive features helped dramatize the fact that AOL Time Warner could not be trusted to execute their promise of open access. Arguably, they lost all of their creditability once the Federal Trade Commission and the Federal Communication Commission finally saw it. As I said at the time, "the term sheet was so anti-competitive that Joseph Stalin could barely have improved it."It was hardly surprising that Time Warner, then the second largest cable company in the U.S., would build an insurmountable barrier to entry. They after all were granted geographical monopolies to all of their cable territories from the start. When Time Warner kicked ABC/Disney off their cable networks out East in May of 2000, they provided a large example of the power such a monopoly has over access and content. AOL itself had perfected the "walled garden" on its Home Page. By controlling the access of its customers to the Internet AOL could drive them to its advertisers goods and services.Even after the merger approval, AOL Time Warner was caught denying advertising placement to other ISP's for dial-up and DSL services at the exact time their ad revenue was shrinking. In all of history, no monopoly ever gave up its coveted position willingly.AOL, on the other hand, had fought long and hard for ISP Open Access to all cable companies' high speed Internet infrastructure before their merger announcement of January 10, 2000. In fact, Steve Case gave a speech in San Francisco, CA about Open Access while at the same time he was in secret negotiation with Time Warner. To combat charges of hypocrisy, AOL and Time Warner issued a "memorandum of understanding" on February 2000 that supposedly guaranteed access to all interested ISP's. The trouble was that the memorandum was unenforceable and the term sheet for access was a draconian nightmare no one could sign. Open access became, as a participant in the negotiation between the two companies, "our huge bugaboo."AOL certainly revealed their willingness to play fast and loose with the truth. They would do anything to get the largest merger in U.S. history done, especially since it would give AOL privileged access to the broadband technology they so desperately needed.Like many other Internet companies, AOL had used aggressive accounting practices for reporting marketing expenses, whereby they became a depreciable asset instead of an immediate expense of doing business. Upon reflection, this was one of the first examples of a company without an ethical compass.We all should have worried when Steve Case told the media in the euphoria of the merger announcement: "We want to be the most respected company in the world."Thank goodness, Mr. Klein did his job as an investigative reporter by uncovering much of the unseemliness; and now, he has done his job as a business storyteller by revealing many of the truths about the largest debacle in the business history of the U.S.

This is a terrific new book by a Washington Post reporter who followed AOL for the newspaper through its ups, its way ups, its downs and its way downs (now). The most appealing part of the book is that the subject is approached without malice. Klein could have taken a muckraking, expose the crooks attitude, but he did not. Perhaps this is because he spent so much time with "the boys at AOL" during the time he covered them for the Post.The book appears to be very thoroughly documented and balanced. In the end, however, we are left with one, strong conclusion: AOL cooked the books to get the merger done with Time Warner and continued to cook them as long as possible to keep the numbers up after the merger. They did so, as has been documented previously, by booking phony ad sales when money flowed both ways and counting as revenue money that had not yet arrived.This book is lively, a quick read and not harshly judgmental toward AOL, even while presenting strong indications that negative judgments would be justified. As at other high flying enterprises in the 1990s, AOL people often used company money like it was Iraqi dinars looted from the central bank. The "expensed" lavish trips and parties and rode their stock options to the stars. Almost every reference to Steve Case finds him in a different city, often other continents. Why work when you can travel in high style?There is no doubt that a kind of stock and money madness enveloped AOL. Perhaps the most disturbing aspect, for some, will be the revelations about how much money was wasted both by AOL and its stock optioned employees on their own. While the record is shocking, I have a feeling that Klien barely scratched the surface in this regard.It is clear, from this book and other reporting, that AOL should never have taken over Time Warner, any more than a mouse should try to eat an elephant. AOL was flying high on the combination of its subscriber revenues, temporarily inflated ad revenues and, more importantly, the expectations of investors that the Internet had no known limits (it did). Most of this had to be known Steve Case and his high spending, high flying group at AOL. They went ahead with the merger anyway, at all costs. Turns out, they lost their jobs and, for many of them, their fortunes. This was not a good merger that went bad, this was a merger that should never have even been considered, much less finished.This book should be interesting to anyone who follows American business, who invested in tech stocks during the gold rush and anyone else who simply wants to learn about human nature and money. Highly recommended.

Fantastic

実に入念に記された一冊であると思う。AOLの誕生と発展、AOLとタイムワーナーという最大の合併までの、両社のせめぎ合い、政府当局の思惑、ライバルによるロビーイング、ネット・バブルと不正会計のメカニズム、トップ交代劇。そのおりそのおりにおいて、日本に時折ニュースが伝わってきたけれども、スティーブ・ケース、レビン、あるいは、パウエル（現国務長官）等々、さまざまな人物がどのようなバックグラウンドを持ち、どのように関わったか。そのようなこともはっきりと描かれている。質の高いジャーナリストの作品だと思う。一方、AOLの成功までの道筋からは、新たな加入者獲得型のビジネス・モデルにおいてモメンタムをどのようにつくるのか。ということに関するヒントもところどころにあるような気がする。今となっては、どこが拙かったのかというところにAOLについては視点が行った情報が多いかもしれない。これからもそうだろう。しかしながら、どのようにしてAOLが成功したのかということについて、しっかりと過程が描かれており、ケースとして学べるのではないかとも思う。邦訳が待たれる。