Time Warner: Get Over AOL Already

As I watch the internet business really gain traction, I am reminded of a key player which, to my mind, remains unacceptably hobbled. Yup, it’s my AOL hobbyhorse, and I’m in a mood to saddle up. Maybe it was the MSN trip, I dunno. But I’ve written this before, and I will say it again. The people running Time Warner, who lost their company to AOL in 2001, then won it back in bitter street fighting during 2002, need to stop punishing AOL for the damage the deal did to their net worth (don’t think business is personal? Talk to Time Warner folks. Trust me, it’s personal. And it ain’t just the execs. It’s the whole Time Warner establishment…). My prescription? Cut AOL loose to be the mammoth success it could be, if only its management didn’t have to cowtow to Time Warner’s rear view mirror approach to the world. I mean, could you imagine Google, Yahoo, or even IAC run by Dick Parsons?

Here’s the lead to a recent Washington Post piece on AOL:

When AOL Chief Executive Jonathan Miller strides into the 10th floor boardroom at the Time Warner Center in New York tomorrow, he will face a difficult challenge: persuading board members that America Online can return to growth, even as its core dial-up subscription business continues to rapidly shrink.

Why on earth would someone who has 25 million paying users and a top five web property have to convince anyone that he has a growth story? I mean, really, think about that. Ads alone, he’s in the pink….unless, of course, his strategic goal is to assuage the Time Warner execs whose egos were bruised when they sold their own company short to Steve Case four years ago. Let’s get real here. And get over it.

This is a company with the largest installed paying base of internet users in the world! Hello? Time Warner execs, get over the fact that you sold yourselves short in the AOL deal, and let this company do what it must. And what must it do? Well, frankly, it must become a software-based information services company, as Google, MSN, and Yahoo already are. It needs its own R&D labs, its own world class engineers and product managers. It needs to stop forcing good people to work in New York and Dulles. In other words, it needs to be the kind of company Time Warner has no idea how to run or manage. My opinion? The AOL deal was smart, but you lost faith almost immediately. You decided the internet economy was just so much hooey, then you damaged both the AOL and the TW brands as you backpedaled and blamed those sneaky new economy folks at AOL for selling you a false promise. Well, it’s 2004 now. As they say here in California, let it go. Go buy more cable networks, lick your wounds, and prepare for the next time you do something massively dumb. Or, alternatively, get behind AOL in a major public way, and play the game along with Barry Diller, Terry Semel, the Google Guys, and Bill Gates. Because trust me, these are the folks who will own the equivalent of network television for the next decade.

But, I don’t think you buy that idea – you bought it once, and it didn’t pan out. So you want to get the most out of AOL? Clean it up and spin it out. Enough said. Move on, Time Warner. The AOL mess is no longer Case or Pittman’s problem. It’s yours. And if you don’t want to run this company, let someone else do it.