Business World: The Music Stops, Again
The Internet continues to claim victims, the latest being Steve Case of AOL and Sony Music's Tommy Mottola.</br></br>Executives get bounced all the time for leading their companies and shareholders into disastrous deals. Mr. Case is getting bounced for cutting too good a deal for shareholders of the former AOL. His Time Warner colleagues can't forgive themselves for buying at the top of the Internet bubble, a regret for which there is no cure.</br></br>Let it be recalled, though, that like a lot of bubble misanthropes, Time Warner's board and executives went into the deal with eyes open. Gerald Levin, then CEO, remarked at the press conference that he accepted "the market capitalizations in the Internet space" as something "profound." Whether they were profound or not, they certainly proved short-lived, the Nasdaq beginning its dive a few weeks later.</br></br>Last week was an opportune moment for Mr. Case to beat a retreat. AOL's new "turnaround" plan is so screwed up by internal Time Warner compromises that it seems doomed to fail. He wasn't doing anybody any good by sticking around and putting his imprimatur on it.</br></br>Only by exploiting preferred carriage on Time Warner's own cable systems could AOL Broadband hope to achieve enough critical mass to demonstrate to other cable and DSL providers that AOL could help them generate better revenues than they could on their own. But this would mean cannibalizing Time Warner's pre-existing Road Runner broadband service, something the Time Warnerites evidently were unwilling to do.