Verizon is buying AOL for 4.4B. It could be about ad-tech. It could be about mobile. It could be about content. I’m not sure why it’s happening and i’m pretty sure that it’s not going to work out well for Verizon. But, more than anything to me, the sale feels like an epilogue to part of internet history.
AOL is specail to me. It was my first job out of college. I had a great boss and I learned a ton. I met some amazing people, many of them have become good friends that i still talk with today. I also learned all the reasons why working at a big company sucks and it drove me to want to work at smaller, more nimble companies.
I also think that the AOL / Time Warner merger is a misunderstood story. Let me defend it for a second.
Here was the premise: AOL had lots of digital capabilities and was a fast growing internet company. Time Warner was an “old media” company that had lots of valuable media assets (HBO, Warner Music, CNN, Warner Bros., Time Inc., TW Cable). The idea was that AOL would inject it’s web design, technology and knowhow into each division. For example, it could offer web video for TW Cable or digital media solutions (a player and online store) for Warner Music. Apparently AOL SVP Miles Gilbourne came up with the plan. Steve Case pitched it to then-Time Warner CEO Jerry Levin and they all agreed.
As part of the merger, Steve Case would become Chairman, Levin would be CEO, and there would be co-COO’s in Dick Parsons from Time Warner and Bob Pittman from AOL. This was thought of as a merger of equals.
But what actually happened is that once the merger actually was finalized, Levin decided that he didn’t like that original plan, said “fuck it,” and decided to make AOL just another unit in the Time Warner set of divisions. Case was somewhat powerless as Chairman to stop him and the rest is history. None of the bold and cool ideas that were on paper at the time of the merger actually happened and the sad slow decline of AOL began.
As part of this, i went to work in the Corporate Technology group at AOL Time Warner corporate. We sat above all the divisions and it was our responsibility to figure out ways for each group to better work together. I remember one off-site where all the CTO’s got together and were patting each other on the back for making the Harry Potter trailer – a Warner Bros film with a trailer appearing on AOL’s homepage – one of the most viewed trailers of all time. Everybody was mumbling the words “synergy” and feeling good about themselves.
I’ll always remember what happened next. Steve Case rolled into the meeting and got up and basically said, “you guys need to challenge yourselves more. Showing a movie trailer is not changing the future. We have amazing assets and amazing talent, and if the only thing we’re getting excited about is promoting a movie trailer, then we’ve got real problems.”
He was right. The merger could have done some amazing things. But it didn’t. It was a failure because:
- AOL was powerless to do anything but operate as a silo
- Steve Case wasn’t running the company, Jerry Levin was.
- Time Warner was scared of changing
Thus, the long slow decline occurred.
Thanks for the good memories AOL. It was quite a ride while it lasted.