'Thank God'

The postmortems refer to Steve Case as a visionary, but within the midtown Manhattan headquarters of the Time Warner magazine division, Sunday's announcement that the AOL-Time Warner chairman was stepping down was treated with the jubilation normally reserved for across-the-board raises and increased expense accounts.

"Thank God," one upper-level staffer at a Time Warner magazine told NEWSWEEK on condition of anonymity. "It was as if it was the Middle Ages and we'd been leeched for three years. There was almost no blood left. And finally, they realized this method of treatment wasn't gonna make the patient any better."

Indeed, Case's resignation has raised the tantalizing possibility--tantalizing at least within the company's magazine division--that a divorce, or at least a separation, could be in the making. "Divorce seems like the only option," magazine expert Samir Husni told NEWSWEEK on Monday. "This is getting one step closer to formalizing a divorce. In the history books, that merger is going to be one of the biggest mistakes in business that ever took place." At the magazine headquarters, staffers were also openly talking about the possibility of a spinning off--or even an outright selling--of the AOL division.

Husni thinks Case's departure will mean the continued ascendance of Don Logan, currently the chairman of AOL Time Warner's media and communications group. Within the company, Logan, along with current CEO Richard Parsons (who last year replaced Gerald Levin) and former HBO chief executive Jeffrey Bewkes, are seen as the three men most likely to vie for control of the company. As one media observer and former Time Inc. staffer put it, "One wonders, with Case--and, more generally, festering anti-AOL rage--out of the way, how the Bewkes vs. Logan vs. Parsons power triangle will play out. They can now focus on killing each other rather than killing Case."

Case's departure is already being described as another one of the seemingly endless final nails in the coffin that will bury the Internet boom of the go-go 1990s. When Case orchestrated AOL's merger with Time Warner almost three years ago, the Internet boom was just past its peak and the corporate accounting scandals that have gripped American businesses were not yet a cloud on the horizon. Since then, dot-coms have folded at a vertiginous rate.

Case's departure will also occasion another reevaluation of synergy and convergence. (Remember how articles in Talk magazine were going to become instant movies made by Disney and Miramax, later to be touted on ABC shows? For that matter, remember Talk magazine?) But it's worthwhile to note that with Case gone, the only two men within the AOL-Time Warner power structure who actually created a company--Case and Ted Turner--have been pushed to the sidelines.