AOL Time Warner Chairman Steve Case announced yesterday that he's stepping down from his position, casting further doubt on the troubled company's future. Case came on board when Time Warner merged with his company, AOL, the leading ISP. However, in the 2 years since the companies consummated their record-setting merger, the value of the combined companies has declined more than $200 billion, enraging shareholders and board members. Case has faced months of internal pressure, including an abortive attempt board members made last fall to remove him from power.
Case's resignation signals that AOL Time Warner is prepared to take radical steps to return to profitability, including, possibly, a spin-off of the AOL division. The failure of the merged companies--which Case billed as the nexus of old and new economies--suggests that bigger isn't always better in today's business climate and that the proposed synergy between AOL's technology and Time Warner's entertainment holdings was more contrived than real.
Case, who's the merged company's only remaining high-profile AOL executive, will continue as an AOL Time Warner board member. I expect the company's first move in the post-Case era will be another name change--back to Time Warner.