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It is precisely this combination of decentralized structure and a desperate hunger for Wall Street-pleasing growth--especially necessary for a company whose balance sheet includes $17.8 billion of indebtedness--that propelled the sale to AOL. Time Warner's stuttering, stumbling, ill-managed attempts to score on the Internet (in which I and several of my Time Inc. bosses have participated) have foundered on the inability of the various divisions to work collaboratively and on the relentless bottom-line pressure that discouraged investment in the distant future when there was a quarterly target to meet.
AOL, of course, has had no such problem. Ever since Case fought off the awful negative publicity surrounding the late 1996 fiasco in which customers couldn't access the overburdened servers, the company has been rocketing from one success to another. The number of AOL zillionaires has multiplied with each upward ratchet of the stock price, and the atmosphere in Dulles sometimes feels like it's ready to combust. The unnamed Time Warner executive who told the New York Times that merging the cultures would be easy because the AOL people are laid-back "latte drinkers" would do well to re-examine what's in those cups.
While Case plays the statesman and AOL president Robert Pittman deploys the substantial charm of a born salesman, the next few levels of management harbor a cadre of "killers and cutthroats," says a former analyst intimately familiar with the company. AOL's laid-back latte drinkers took early retirement ("I just didn't want to sit in on any more screaming matches," says one), while the real sharks, believing themselves invulnerable because of their vast wealth, continued to swim the halls in Dulles. The piped-in music may be the Eagles, and the furnishings may look as if the Ikea catalog had been redesigned by Antonio Gaudi, but deep down, AOL is about as New Age touchy-feely as a hammerlock. Sure, it used to be "ponytails, tattoos and surfboards," recalls Mark Walsh, a former senior vice president of AOL who now runs the business-to-business e-commerce site VerticalNet, but "AOL became the most aggressive company in the Internet business--and, as a result, the most successful."
The typical Time Warner manager, especially in its entertainment divisions, would never be mistaken for St. Francis of Assisi. But the deal-a-minute, scream-until-you-win culture of AOL is not likely to tolerate the stately pace of a company whose decision-making arteries are often clogged with consultants and task forces. California venture capitalist Jennifer Fonstad anticipates that the slightest whiff of old-economy culture in the halls of Dulles will create "a huge opportunity for headhunting. I can't underscore how excited many of us are at the prospect of getting good AOL executives and engineers out here."