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Someone gave me a shrewd piece of advice when I became Editorial Director of America Online in 1997. "If you don't have conflicts of interest," she said, "you're not doing it right."
I'm gone from AOL now, and most of my conflicts of interest have evaporated. (Disclosure: I've known Kara Swisher for six years. She used to bug me for information; I never had any.) And I'm "over" AOL; the fascination of its internal drama faded as the company's prospects declined. As it is for many of you, AOL is mostly an e-mail address for me; how warring millionaires fought over the arrangement of the deck chairs on this particular Titanic is of very little interest. So when a book about the AOL/Time Warner merger appears (and there will be four of them before the publishers have exhausted everyone's patience), I'm tempted to look at the index, turn to any pages that involve my pals or me, then move on to books with characters a bit more engaging than white male executives.
But THERE MUST BE A PONY IN HERE SOMEWHERE, Kara Swisher's account of "the AOL Time Warner Debacle and the Quest for a Digital Future," was too good to put down so quickly. For one thing, Swisher is a believer in the romantic promise of the Internet. She understands, as most observers don't, that the Web is about much more than ripping off Sony music or downloading porn; she gets that the Web connects us, soul to soul, and, as such, represents a better chance to form lasting bonds, affect politics and share what's true than we find in the so-called "real" world. And because AOL was the way most of us got our first glimpse into that powerful, spiritual possibility, what happens to AOL matters.
Swisher's is also the most important book to come out about AOL thus far because she knows the people as people. As a Wall Street Journal reporter/columnist and, a few years back, author of the definitive book on pre-merger AOL, she was in good position to compare the "before" and "after" pictures. In this case, personal knowledge matters a great deal --- rarely has a company recycled its key executives like AOL. It's like a merry-go-round, but with the characters $100 million richer each time they zoom around.
And what characters! Just look at the players:
AOL CEO Steve Case: Years ahead of the mob, he saw that people wanted to be together online. The staggering success of his poster-simple online service made Case a "visionary" and gave him what Swisher calls a "King of France" walk. Arrogant? Not Steve! He still looked boyish, still wore work shirts and khakis, still spoke of AOL in terms of its mission --- he just forgot to "drill down," as they say at AOL, through the business success to the customer experience that used to be his obsession..
Time Warner CEO Jerry Levin: He was the poet laureate of cable TV, but had known nothing but failure on the Internet. His stock price languished, his vision was clouded --- thius Juliet pining for a Romeo couldn't wait to say "yes" to an Internet suitor. As a result, Swisher notes, "a company without an asset bought a company without a clue."
Bob Pittman: When he became President of AOL in 1996, he saved the cash-poor company, insitututed financial discipline and set it on the road to riches. After the merger --- which he opposed --- he became the AOLTW executive charged with selling it to Wall Street. That was an impossible task; the stock price was a falling knife. Taking a cue from the Red Chinese, who send political opponents to the fields to be "re-educated," AOLTW dispatched Pittman back to AOL to fix it. When he failed to produce a miracle in three months, the Time Warner veterans sliced him up in the press with some well-chosen (but always anonymous) quotes. Pittman got the message and quit.
AOL's Myer Berlow and David Colburn: One sold advertising, the other did deals. They're funny. Quotable. Larger than life --- and a lot cruder than their counterparts at Time Warner. Instead of softening their edges after the merger, they broke out the whoopee cushions and the sarcasm in the name of producing more of the spectacular profit they'd made for AOL. There was a lot of put-on in their self-presentation. If you knew them, you might find them amusing; the Time Warner people saw only obnoxiousness. And so, predictably, AOL's Rosenkranz and Guildenstern were run out of Dodge with great glee.
AOLTW CEO Richard Parsons: As Swisher describes him, you have to wonder how this guy lucked into the big job. Never misses a party, never lacks for a bland quote; someone describes him in these pages as "a non-alcoholic beverage with greatness foisted upon him." Biggest decision so far: "agreeing" with America Online to remove AOL from the corporate name.
The Time Inc. Establishment: They have no names. Know them by their forked tongues, their concealed weapons, their unremitting bitterness over the falling stock price and the wealth of their AOL colleagues --- and their enviable record at turning corporate defeat into personal triumph. They had carved up their Warner acquirers a decade ago, and they had no doubt they could do the same to bumpkins from suburban Dull-ass Virginia. Most amusing victory: AOL "agrees" to pay $40-to-60 million to be the exclusive online home for once-free Time Inc. content.
This is not just a fast-paced, well-told story, it's one that invites readers to look for a moral. Some will think it's hubris, others the blinding power of riches. I see the book as a study in conflicts of interest --- well before the merger, I would argue, AOL stopped focusing on its customers and started living for Wall Street. The execs didn't care enough to notice that AOL's technology was rusting, that its programming was 24/7 Britney, that members had to fight their way through a sea of pop-up ads to get to their mail.
Now millions of AOL subscribers have defected and the stock is mired at 15. Unless the current AOL management produces the necessary miracle, Time Warner may sell AOL for whatever it can get. Or AOL may be milked as a cash cow until it just…withers away. Hard to believe? Well, Timbuktu was once the trading capital of the world; now it's a sorry collection of mud huts.
Kara Swisher is a loving critic. She'd like AOL to have a happier destiny, so, in her final chapter, she suggests "13 easy steps" to fix AOL. Many of them are ideas that my pals and I suggested. Often. Nobody listened --- a Taliban of white male vice presidents much preferred PowerPoint presentations that forecast glorious revenues to modest proposals for making AOL more customer-friendly. Even now, in meetings, AOL programming VPs still speak of "habituating the user." As if!
No, you don't have to be a disgruntled shareholder or Internet geek to care about THERE MUST BE A PONY IN HERE SOMEWHERE --- this cautionary tale is a must-read for anyone in danger of forgetting that success comes from pleasing customers, one customer at a time.
--- Reviewed by Jesse Kornbluth
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