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There
Must be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest
for a Digital Future by Kara Swisher Rating: ••• (Recommended) |
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Culture Clash Wall Street Journal writer Kara Swisher follows up her 1998 book, aol.com,
with a fast moving presentation of the AOL Time Warner merger titled, There Must
be a Pony in Here Somewhere. The catchy title led me to pick up the book,
and reading a chapter or two kept me captivated to the very end. The clashes
of the AOL and Time Warner cultures left plenty of blame on both sides; they
felt they had nothing to learn from each other. Swisher’s access to top
executives and her synthesis of what she hears from them, makes reading this
book a real pleasure. Here’s an excerpt from Chapter 6, “Way, Way After the
Gold Rush,” (pp. 199-202): The Life of the Party "You have to remember," said Ken
Auletta, the New Yorker media writer and a longtime observer of Time Warner,
as we considered the unusual career of Gerald Levin in the fall of 2002.
"He was like Gromyko, always on the podium." Auletta was referring to the late Andrei Gromyko,
the dour Soviet foreign minister who had a talent for survival, outlasting
leaders from Stalin to Gorbachev and also nine U.S. presidents. Like the
indestructible Communist diplomat, Levin had always seemed likely to be the
last man standing, no matter the crises that had begun to engulf AOL Time
Warner in 2001. After all, despite widespread discontent internally
and on Wall Street, a lack of traction for the synergies and financial
returns he'd touted, and a rapidly weakening economy) most expected that
after 30 years of climbing to the top of the corporate ladder. Levin would
overcome these as well. Even with the rumblings of trouble that commenced
almost as soon as AOL and Time Warner merged, it was still too early to count
out the wily corporate politician. It turned out a lot different at Time Warner, where
animus toward Levin runs deep. He was the guy who decimated the employees'
40lKs. The guy who handed the keys of an iconic, 80-year-old American
business to a 15-year-old upstart. Who sold the company's soul after asking
almost no one at Time Warner if they thought it was a good idea. Who didn't
bother with adequate due diligence or other strategies to protect Time Warner
stock. Who allowed AOLs troops to rampage through the corridors of Time
Warner. Who wagered Time Warner’s future on a dream that had already failed
too many times before. "It was an incredible case of intellectual
arrogance," Michael Fuchs, a pugnacious former Time Warner executive
whose relationship with Levin was both highly emotional and deeply troubled,
told me in a common assessment of his former boss. "He bet the company
when he didn't have to." That was the nice way of putting it. In 2002, Time
magazine critic Robert Hughes expressed more raw feelings in a scathing email
to Levin. Levin insisted to me he didn't receive it, but he could still have
read it—like the rest of New York's chattering class—in Tina Browns Sunday
Times of London column after Hughes had forwarded it to her. "How can I convey to you the disgust which
your name awakens in me?" wrote Hughes, whose reputation within the
company was legendary for both his prodigious writing talent and his
obstreperous personality. "The merger with Warner was a catastrophe. But
the hitherto unimagined stupidity, the blind arrogance of your deal with
Case, simply beggars description. How can you face yourself knowing how much
history, value and savings you have thrown away on your mad, ignorant attempt
to merge with a wretched dial-up ISP?" This was ugly enough, but Hughes saved his real
wrath for the end. "I don't know what advice you have to offer, but I
have some for you," he wrote. "Buy some rope, go out the back, find
a tree and hang yourself. If you had any honor you would." Even in the
cutthroat environment of big business, that's an astonishing thing to suggest
to someone, no matter how angry you are. Yet these are exactly the kind or
emotions the AOL Time Warner deal and its aftermath aroused. In
fact, if you took a stroll through the Time magazine bureau in
Washington, D.C., in the fall of 2002, you’d have seen Hughes’s "hang
yourself" email posted proudly above the copy machine. In the halls of
the Time-Life building on Sixth Avenue in Manhattan, the bulletin boards were
papered with news clips critical of Steve Case and Bob Pittman, too, with a
smattering of editorial cartoons about corporate greed and crashing stock
holdings. By this time, it was hard to get very far in reporting this story
without getting an earful of angst from everyone at AOL Time Warner,
especially concerning the financial pummeling employees had suffered—whether
it was a magazine reporter who became unable to send his kids to college or a
studio mogul who'd lost millions. The
plunge of AOL Time Warner stock decimated Levin's own wealth as well, since
he sold little of his holdings as the stock tanked. Worse, he borrowed in
order to buy stock. And his lavish spending in greener times (as well as the
expected cost of his impending divorce) had led Levin in late 2002 to start
selling his various properties, including an expensive Upper East Side
triplex (once featured in Architectural Digest), a group of
upscale condos in Santa Fe, and his interest in a California vineyard. In
winter 2003 he told me that his personal net worth had fallen from the
neighborhood of $400 million to around $10 million. "And I will probably
not hold on to much of that," he added in a resigned voice. Yet
it's hard to feel too sorry for Levin, since he still controls large holdings
of stock options that could be worth a fortune someday if the share price
ever rebounds. And, after years of excessive multi-million-dollar salaries,
he still pulls down an annual $1 million consulting fee from AOL Time Warner
as part of a five-year contract, as well as $400,000 a year as part of his
pension, when he left the company—a fact that enraged his critics. When Levin
abandoned New York for the West Coast in 2003, some would joke that Marina
del Rey, where Levin had moved to be with the new woman in his life, could
now be considered "the newest city in the witness protection
program." Many
other things about Levin would infuriate his detractors, but none more so
than his steadfast refusal to say he was wrong. In all the interviews I had
with him. Levin never once expressed any doubt that the merger had been the
right move. He may be the last one who believes in the merger, but he still
believes in it all the same. “When the economy comes back and everyone
figures out how to work together, they will reconsider me," he said,
ever the oracle. "I believed in the Internet and I believe in it
now." He also refused to say he might have been tricked by AOL, as many
at Time Warner think. "Of course, I did trust the integrity of Case,
Pittman, and Kelly," Levin wrote me in an email in 2003. "I don't
believe they engaged in deception." This
stubborn insistence that he sees what no one else can see is typical of the
contrarian, go-it-alone style that has been the trademark of Levin's career.
Many years ago, the Orlando Sentinel quoted him as saying in
weird fortune-cookie style, "He who makes a living from a crystal ball
must learn to eat ground glass." His critics believe that this time, his
last prophetic vision—the merger of AOL and Time Warner—will leave him
chewing into eternity. But he won't be alone in partaking this unpalatable
meal. Before it was all over, almost everyone associated closely with the
merger would be taken down in some fashion. Soon enough, the acronym AOL
would come to stand for "Another Ousted Leader." And when it was
over, the last man standing on the podium would turn out to be Levin’s loyal
lieutenant, Dick Parsons. He, like Gromyko, would be the only true survivor. Books like There
Must be a Pony are the print equivalent of reality TV shows. There’s a
certain voyeur quality to each episode, and a certain pleasure that comes
from the revelation of others’ foibles. Swisher makes the time spent on this
book enjoyable, especially for those who enjoy the misfortunes of others. Steve Hopkins, December 22, 2003 |
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ă 2004 Hopkins and Company, LLC The
recommendation rating for this book appeared in the January 2004
issue of Executive
Times URL
for this review: http://www.hopkinsandcompany.com/Books/There
Must be a Pony.htm For
Reprint Permission, Contact: Hopkins &
Company, LLC • 723 North Kenilworth Avenue • Oak Park, IL 60302 E-mail: books@hopkinsandcompany.com |
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