October 1, 2002 2:27 PM PDT
AOL's Case upbeat despite challenges
In a speech to investors at the Goldman Sachs Communacopia XI Conference here, Case outlined the many challenges and opportunities that lie ahead for the world's largest media company. But absent from the discussion was the biggest question of all: Case's standing as chairman of the company. Case has been under pressure from reports that a faction of board members was plotting to remove him as their chairman.
Although investors attending the conference stopped short of asking Case to comment on the reports, the embattled chairman touched on AOL Time Warner's challenges since the merger.
"I've learned a lot over the past decade, including you're never as good or as bad as the press or the Street says you are," Case said about the company. Still, he maintained his unwavering belief that the company will be poised to maneuver around AOL Time Warner's current difficulties.
Case also clarified his responsibilities in the company's upper echelon. He said he will continue to lead the company's board of directors, work closely with CEO Richard Parsons on strategy, and help fix some of the many problems affecting the troubled America Online division.
Case's comments come as reports continue to surface about a faction of board members attempting to oust the chairman. Although the company has denied that Case's position is in trouble, the process could be drawn out in a timeline set by the company's bylaws. The issue could reach a crossroads next March when board members vote to renominate members for another one-year term. The question of Case's tenure could also be played out at a shareholder vote the following May.
Still, Case remains committed to solving the many problems that have plagued the greatest media merger in history. Besides its depressed stock price, AOL Time Warner is taking steps to fix its embattled AOL division, which is suffering from massive revenue declines in its online advertising business and from an investigation by the Securities Exchange Commission for the way it accounted certain revenue.
The nearest glimmer of good news will be the Oct. 15 release of AOL 8.0, the latest version of the online service. AOL management, which recently underwent a reshuffling after hiring new CEO Jon Miller, has hinged AOL's turnaround on improving its services to lure new subscribers and keep members from defecting.
Case said AOL would also focus on improving its broadband product, which investors have been clamoring about since the birth of the merged AOL Time Warner. This will involve adding unique content only for broadband subscribers and increasing marketing for its "Bring Your Own Access" service, which lets people pay a lesser fee to use AOL from another broadband ISP (Internet service provider). Broadband is important because it opens the door for AOL to sell additional services while receiving greater revenue from subscribers.
Case added that the company is considering tiered pricing for AOL by which the company could charge different rates for different plans. Case did not elaborate on the topic.