Customer Reviews

Fools Rush In : Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner

5 star:		(15)
4 star:		(5)
3 star:		(2)
2 star:		(2)
1 star:		(0)

 

 

This was the biggest of them all. In the madness for tech stocks where millions rushed in to make a fast buck, as is the case with all such crazy manias starting with the legendary tulips , billions of dollars were generated out of thin air, virtually, and in the most recent decade , perhaps digitally. Suddenly, reality strikes, gravity starts acting and the rest is history. Sadly, history repeats itself.

This book is the story of AOL using virtual money to buy real assets. If the real story is interesting, Nina Munk has made it exciting. Grass on the other side is greener, the old saying goes. AOL wanted something real to latch on in its digital world while Time Warner was craving for digitization. A merger, would be a perfect marriage, as it appeared to the CEOs of the two companies. Three years since then, over $ 200 billion of stock valuations have evaporated back into where they belong - cyberspace. It is said that greed, optimism and herd mentality are the three drivers of capitalism . Need a better example ?

A repetition of these obvious facts is not what makes this book a good read. Nina Munk has diligently tracked the business histories of the companies involved, listed the key players and their biographies and then integrated this background into the main story of the merger and its problems.

Easy to read, and light on technical aspects. At the end, I personally feel that Time Warner in its new form has the capacity to come back. After all it is this true spirit of free enterprise that keeps America going. When the going gets tough, the tough get going.

WOW- what a book. I'm not in business, but stumbled across this book and ended up reading it from cover to cover in one sitting. It really reads like a Greek tragedy; each character enters the story with certain fatal flaws and the end of the story is almost pre-destined. Hard to believe that it's non-fiction. There is a remarkable amount of research in this book- the author went to great lengths to interview what seems like hundreds of sources. Given that the AOL story is so "of" the late '90's, I think that this eloquent book will mark the time, much like Bright Lights, Big City marks the '80's. This book's going to be required reading form business students for years to come.

Having read Stealing Time by Alec Klein, I was sure that I didn't want to read another book about the AOL-Time Warner fiasco. But then I happened to see the cover of this book at the library and couldn't resist its delightful cover. And I'm glad that the cover drew me in.

Ms. Munk has written a delightful story of the world's worst large merger that features lots of texture about the key players (especially Gerry Levin) and is written in a simple, effective style. Her book has more balance than the Klein book which emphasizes the sales and accounting legerdemain at AOL.

One of the book's most engaging qualities is that it is filled with powerful and interesting quotes from the participants and the observers.

I have had the opportunity to observe Time Warner in the past as a consultant, and I was struck that Ms. Munk did well in capturing the management style of the company and its reclusive CEO, Mr. Levin.

I would have rated the book higher except that this report still leaves the central mystery of AOL-Time Warner unexplained . . . why didn't anyone at Time Warner or its advisors figure out that AOL's profit success was based on a three-card Monte game before the deal was announced? Either people were bought off or they were monumentally stupid. Getting to the bottom of that mystery will have to await yet another book on this subject, I'm afraid. Ms. Munk puts it down to Mr. Levin's "big-picture, don't-bother-me-with-the-details" mentality.

If you want smooth, easy reading that gets most of the facts right, this book is a good choice. I particularly commend this book to students who are learning about how to make (and more importantly, not to make) acquisitions. If you mainly want to know about the AOL shenanigans, I suggest Stealing Time instead.

This is an infectious read. The book itself is beautifully presented and Nina Munk writes like an angel. Well, if you're not Jerry Levin, et al., she does. She has a knack for making the words flow and the personalities as vivid as the sights of childhood. Her hard-edged but clean and crisp style will be widely imitated I predict. Her ability to research and to sift through the results of that research and to lay it all out in such an intriguing way is something close to amazing. I really don't give two hoots about Steve Case, Jerry Levin, the old Luce culture ("I am biased in favor of God, Eisenhower and the stockholders," p. 7), the Warner Bros. legacy (sleazy ethics and "foul tongues" and rumored "Mafia connections," p. 35), the dot com upstarts ("You people really need to start moving at Internet speed," p. 231), etc., but Munk makes it fascinating, like egomaniacs twisting in the wind, so to speak.

But this story isn't just about AOL Time Warner but about corporate America in general, about how merger mania and golden parachuted moguls can play fast and loose with our money, our livelihood, our country, and our future. It's about the collateral damage, the megalomania, the broken hearts and the evaporated portfolios. It's about the mentality of corporate CEOs like Levin who as he turned sixty wanted to be remembered for something other than the bottom line, "for integrity...high moral principles; and wisdom." (p. 133) Ah, yes, a lifetime of chasing money and power and now True Religion. One is reminded of Bill Gates with the very demanding problem of how to distribute all that money wisely before he dies.

Munk knows these people. How she got them to be so carelessly candid at times amazes me, especially her work with Levin. She understands their psychology and to some significant extent, their business. She had to, to write this book and make it work. She packs the text with spiffy and sometimes all too revealing quotes. She has the heart of a baggy-eyed scholar and the soul of a muckraker. The almost surrealistic give and take between Case and Levin as they cooked The Deal reads like something out of a Hollywood movie. Whose ego, whose sense of personal power, and imagined historical accomplishment and brilliance needed massaging the most by whom? And who would steal more from the other? And the ease with which Salomon Smith Barney and Morgan Stanley each got $60-million for their part in the deal reads like tales of manna falling from heaven.

There are some black and white photos in the middle of the book. The test is exquisitely edited and proofed, and the book handsomely designed. Munk ends this "morality play," as she calls it, with a curtain call of the cast of characters in an epilogue and brings us up to date on what has happened to them and what they're doing now.

Incidentally, my subject-line quote about a "mess of porridge" is from Robert Murdoch, no doubt licking his chops. (p. 280)

Bottom line: you will be kept up at night reading this page turner. Better yet take it on that trip to Singapore. It's a jet-lag killer.

Munk's book reads like a fast paced novel and is easy enough to understand. It has not received the publicity of books like 'Good to Great' although in many ways it provides fundamental information on how big business is really conducted- for the benefit of pushy and powerful owners, managers and special interests.

Read this book to get real insight into how compliant board members and clueless senior management can wreck your 401K account. If an insider like Ted Turner could lose $ 8 billion in a three year period, where does it leave Joe Blow who plans to retire on his stock market investments?

Munk's book surprised even a cynic like myself- how could 2 persons deceive and mislead so many professionals and investors and evaporate $ 200 billion in less than 3 years? If this story does not provoke actionable investigations into the effectivness of oversight and toothlessnes of the legal system (to protect investors), I am not sure what will. In this regard, it is a very valuable read.

Great book about the fiasco at AOL Time Warner. I don't always like business books, so I was glad to find that this one had strong narrative. It's really about power and how it can be abused. Case and Levin were both guilty of monumental hubris. Author Munk studies their characters like a novelist, without passing judgement, but rather showing how their not-so-well-thought-out plans backfired when they encountered reality.

Those who have read and share my high regard for McLean and Elkind's Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron will find Munk's book comparable in terms of entertainment value (especially humor) as well as quality of thinking and writing. Both were thoroughly researched. The completion of each was aided and enriched by dozens of rigorous interviews of key participants. However, there is one significant difference: senior-level executives at Enron (notably Jeffrey Skilling and Andrew Fastow) have been accused and some charged with serious illegalities whereas none of those involved with the merger of AOL and Time Warner have, at least until now. "This is a the story of how two men, Jerry Levin and Steve Case, caused what may be the biggest train wreck in the history of corporate America." Munk goes on to suggest that "In broad terms, the disastrous merger of Time Warner and AOL epitomizes the culture of corporate America and Wall Street in the late 1900s."

Part One "Resident Genius" covers a period from Time Inc. to Time Warner, 1923-1998. Munk provides essential background information which includes a penetrating analysis of Henry Luce.

Part Two Enter the Internet Cowboys: AOL, 1985-1999. Of special interest to me was Munk's analysis of the working relationship of an odd couple indeed, Steve Case and Robert Pittman.

Part Three The Big Deal: AOL and Time Warner, 1999-2000. Step-by-step, Munk traces the process which eventually resulted in "the biggest train wreck in the history of corporate America." I was fascinated to learn about the nature and extent of Ted Turner's involvement amidst corporate intrigues which would have made the Medici envious.

Part Four "Surviving Is Winning": AOL Time Warner 2003-2003. The material which Munk presents offers still another illustration of the fact that success has many parents but failure is an orphan. "Glued together on January 11, 2001, the company known as AOL Time Warner lasted two years, nine months, and five days before it fell apart....In late 2003, [renamed] Time Warner's stock hovered around $16, down 70% from January, 2001, when the AOL Time Warner deal closed."

After reading these four Parts, I proceeded to the Epilogue in which Munk provides an update on several of the "train wreckers." Meyer Berlow "has found a new vocation: he's a wood turner who spends eight hours a day at a lathe, making wooden bowls and other vessels in his workshop in Williamsburg, Brooklyn." Jeff Bewes and Don Logan are now the two most powerful executives at Time Warner, after Dick Parsons. What about Case? In January 2003, he resigned as chairman of the company. "In late 2003, [he] opened an office on Washington, D.C.'s K Street. From there he oversees his investments, which thus far have largely been restricted to Hawaii, his native state."

For me, Levin is the most interesting. Since the train wreck, he "has distanced himself from his past yet again....[and] rarely communicates with former colleagues or associates. `I'm not in the Hollywood community, I'm not in the media community. That's not where I'm looking for my sustenance.'" Then where is he? According to Munk, Levin has a new life. "He also has a new vocation: the healing arts. Together with his fiancee, Laurie Perlman, a psychologist, Levin is helping to create a holistic mental health institute in Los Angeles, California."

Fools Rush In: Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner is first-rate in all respects. Hopefully those who read this brief commentary will be encouraged to read other recently published books which also examine "the culture of corporate America and Wall Street in the late 1900s." My own recommendations include the aforementioned Smartest Guys in the Room as well as Kara Swisher's There Must Be a Pony in Here Somewhere, Alec Klein's Stealing Time : Steve Case, Jerry Levin, and the Collapse of AOL Time Warner, Jo Johnson and Martine Orange's The Man Who Tried to Buy the World: Jean-Marie Messier and Vivendi Universal, and Rebecca Smith and John R. Emshwiller's 24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America.

There's an Epilogue to this book about the year 2000 acquisition of Time-Warner by that most overvalued of the Internet phenomena, America On-Line. Despite it's being a coda to an account of what may have been history's most disastrous business transaction, this Epilogue consists of updates on 30 or so of the principal personalities involved (along with two corporate entities, one building, and one painting). The structure and content of the Epilogue emphasize that this is largely a gossip-column approach to business history. Author Nina Munk's great accomplishment is that she convinces us that this is exactly the correct approach.

Munk quickly traces the early history of Time, Inc. through the attitudes and accomplishments of its founder, Henry Luce. Then, using the biographical methodology she will employ throughout, she introduces the most fascinating of the drama's players, Gerald Levin, and exploits his early career to bring the story through Time's 1989 merger with Warner Communications. Along the way, other key characters such as Steve Ross (Warner's builder and CEO) and Ted Turner are profiled using Munk's by now standard technique. (I began to be surprised if a new player was introduced without my finding out what his or her father had done for a living.) A parallel section on AOL and its founder, Steve Case, follows. Then "The Big Deal" itself and its aftermath are examined in sections that are rich in personality-conflict, jealousy, culture-clash.

But don't expect that detail to provide any great depth on the business/economic/strategic issues involved, although these are given some necessary attention. As explanatory factors, they are persuasively made subsidiary to the personalities of Levin, Case, and their cronies. It is not news that many corporations both large and small are run as fiefdoms subservient to the whims of their chief executive. But if further proof is needed that "responsibility to shareholders" has become an American myth, this book can provide it.

Case and Levin enjoyed spectacular early successes. At no point in Munk's account does either ask how much of a role good luck or the confluence of favorable circumstances may have played in those successes. To both principals (and to most of the others portrayed here), their success proved their own genius and assured future triumphs. As evidence to the contrary began to mount, they each forged ahead with no deviation in their individual and increasingly incongruous plans.

Munk details the hubris, but she only hints at alternative or larger explanations of how events unfolded. She does place a significant spotlight on the role of advertising revenues. At AOL, the need for this category of income slowly undermines Steve Case's avowed idealism -- of creating something profound that will benefit society. A similar, though less intense, history unfolds at Time, Inc. This suggests a way of looking at the history of media in general. A promising new medium (radio, publishing, television, the Web) is established and its prime mover is motivated by the desire to do social good, to change the way people think or interact. But then economic realities intrude, causing a greater and greater focus on publicity, marketing, and promotion instead of content. Advertising departments come to dominate decision-making, corrupting and degrading the medium, thus draining it of all social value. Somebody - perhaps one of Vance Packard's descendants -- should write a book about that!

This is an excellent book. Not only does it reveal the reasons for one of the worlds greatest business disasters but it does it in a very entertaining way. I found myself laughing out loud at some of the stories showing the incredible stupidity of Steve Case, Ted Turner, and Jerry Levin. The arrogance here was incredible. Although the book is over 300 pages I felt it went way too fast. I would have loved to read another 300 pages. In the end there was one good thing that came out of this disaster. It emptied Ted Turners pockets of the money he would have used to promote liberal social causes. One for the Good Guys!

Nina Munk does a great job telling the entertaining story of this mega-merger debacle. It's a quick read and a sobering look at how major corporate deals are done: ego-driven executives make life-altering decisions on a whim, approved by a board of yes-men and women and a few key institutional shareholders. So little thought went into this deal, especially on the part of Time Warner. The alleged "due diligence" done by the companies and their outside "advisors" is particularly shameful. Might have received 5 stars, but I was surprised by the number of typos and grammatical errors that made it through the editing process (at least a dozen by my count). Note to HarperBusiness: make sure the cake is baked before you take it out of the oven and serve it.