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While AOL tries to find its own ass in the dark, mired in politicking and various other encumbrances, Microsoft and Yahoo are out partnering with RBOCs to get DSL locked and loaded into their service offerings. RBOCs are starting to realize that they can’t drive broadband growth on their own, as it is an expensive proposition for them to market and to build the content, and are open to such partnerships — except, it seems, with AOL.

The problem is Time Warner Cable. It’s doubtful that any U.S. RBOC wants to talk to AOL because of the fear of creating an 800-lb. gorilla that also has Cable assets. ILECs hate their cable counterparts. Moreover, they fear them.

So, one might think that the logic is to spin off or sell off Time Warner Cable. But wait — isn’t that a profitable business? Can’t do that right now… the mother ship needs to maintain as much margin as it can for reporting.

Hmm… maybe they should spin off AOL. Now, since it was AOL that actually bought all the other assets in the first place, wouldn’t that be ironic?



—- 20021122/wr_nm/media_parsons_dc

AOL Time Warner CEO to Sullen Execs: ‘Get Over It’ Fri Nov 22, 6:58 PM ET

Add Technology – Reuters Internet Report to My Yahoo!

By Reshma Kapadia

NEW YORK (Reuters) – “Get over it.” That is what AOL Time Warner Inc. (NYSE:AOL – news) Chief Executive Richard Parsons has told company executives angered by the decline in the media giant’s stock price as he tries to refocus them on the future.

Some employees inside the world’s largest media company could be characterized about six months ago as “sullen but not mutinous” amid disappointment over AOL’s $106.2 billion purchase of Time Warner but now many of them are moving to acceptance, Parsons said at a Variety media conference here.

Parsons said he has had various conversations with executives who feel they have been “screwed” by the deal as the value of their portfolios and options sink amid the 55 percent drop in the company’s stock this year.

“I say to them you have to get over it because you can’t go back and undo the past,” Parsons said. “The challenge we all have is how to figure out how to build value back in the company. If you really really can’t get past that, then you have to go somewhere else.”

The company has suffered from weakness at its America Online unit, which has been mired in slow advertising spending and subscriber growth and federal accounting probes, as well as the failure to deliver on the promises made after the merger.

Many AOL Time Warner employees have left, especially AOL veterans, but Parsons said the company is making progress on priorities he set out this summer including regaining credibility with investors, simplifying the company and fixing America Online.

“Getting (AOL) back on track –stabilizing the business and putting it back on the growth track — we think we are at a point where we have confidence we can do that,” Parsons said, ahead of a Dec. 3 meeting when executives try to convince Wall Street. “But then there is the execution part.”


Going forward Parsons said the priorities include running the businesses well and improving collaboration between the divisions — from America Online, music and publishing to the networks, film and cable systems — instead of each unit’s management trying to protect their own profit/loss.

“To some extent this is a tough turn to make because the media either wants to put you in two categories: it tastes great or it’s less filling,” Parsons said. “What we need to do is run business and run well and extract additional value out of the portfolio of businesses. That’s the challenge for us.”

Much has been said about the company’s failure to date of getting its many fiefdoms to work together, but Parsons said AOL Time Warner has to create an understanding of what it is trying to achieve overall so each unit understands — instead of forcing “synergies” down each division.

“We can’t order them (to collaborate), but can we make the case to employees that if they do things this way the result will better for all,” said Parsons, often characterized in the industry as a consensus builder.

Avoiding deals that would complicate its corporate structure and reducing its $28 billion in debt are also Parsons’ priorities as he tries to turnaround the company.

Parsons, a former Time Warner veteran who took the helm this summer after Gerald Levin resigned, sought to distance himself a bit from his predecessors.

He acknowledged that he had some doubts about the 30 percent growth targets set out after the merger — the targets the company severely missed and that have led to much of the investor discontent.

“(In the 1990s) growth became this enormously important thing and (people) would throw out growth targets without looking at what was under that. You can’t grow a company our size with $40 billion in revenue and a target of growing it 30 percent a year. That’s not the real world (news – Y! TV).”