October 20, 1999 5:00 AM PDT
Time Warner overhauls corporate Web site
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The new site has an e-commerce page that allows visitors to order magazine subscriptions, movie paraphernalia, CDs from Time Warner's record companies, and DVD titles.
A Time Warner representative said the redesigned site is more of a resource about the company than the latest push in its Web efforts. Time Warner Digital Media--spearheading the company's Internet plans--played no role in the corporate site's redesign, the representative added.
Nonetheless, in a welcome video on the new site, a casually dressed Gerald Levin, Time Warner's chief executive, hints that bigger things are yet to come from the company.
"In the coming months we'll be making other important additions to our online presence," Levin says.
Which is precisely what everyone is waiting for. Since Time Incorporated shut down Pathfinder--the division's big, expensive precursor to Web portals--Time Warner has been trying to organize its Web efforts in a more central fashion.
In April, during a waning period of speculation that Time Warner would acquire a Web portal, the company instead unveiled a plan to create a handful of "vertical Web hubs"--Web destinations focusing on news, finance, sports, lifestyle, and entertainment.
The idea was to pull content from Time Warner's bevy of brands and fit it into each of these five sites. For example, stories from CNN and Time would be packaged together in the news hub. Features from Fortune and financial headlines from CNNfn would go into the finance hub. Content from Entertainment Weekly and Warner Bros. Online would be rolled into an entertainment hub, dubbed Entertaindom.
But six months after the announcement, Time Warner's grand Internet plans remain on the drawing board, leading many critics to wonder whether the 600-pound gorilla is nimble enough to run a turn-on-a-dime Web strategy.
Time Warner has taken numerous measures to put a firmer grip on its Web operations. In June, it tapped former chief financial officer Richard Bressler to head the newly created Time Warner Digital Media division. Bressler oversees the hub effort, as well as the company's investment in cable access service Road Runner and its stake in Columbia House, the music distributor that merged with online CD retailer CDNow in July.
Critics argue, however, that centralization already has caused more harm than good. Since the effort began, many executives with considerable Web experience have left.
In April, ex-Pathfinder head Linda McCutcheon left Time Incorporated's New Media division to pursue new opportunities in online business. In June, Lou Dobbs, a CNN veteran who was instrumental in creating the CNNfn television show and Web site, departed to become chief executive of Space.com, a Web start-up about space and technology. Other departing executives included CNNfn vice presidents Craig Forman and Helen Whelan, who left for a Web start-up called MyPrimetime, and CNN dealmaker Mark Bernstein, now president of SpringStreet.com.
According to one Time Warner insider who spoke under condition of anonymity, conflict persists among the various divisions running the day-to-day Web operations, as well as among the executives trying to centralize operations.
Insiders question whether the top brass understand the nature of the Web.
"The Internet is an area made up of people with a fire in their belly and a burning desire to win," one source said. "In a corporation with many people, [executives] have the desire to keep their jobs and make sure they're safe. Those two jobs are not compatible."
Patience can equal bliss
But in a world where Web companies move at frenetic rates to capture market share and then go public, analysts say Time Warner may enjoy a rare luxury: time.
"They have the premier collection of media assets representing both content and distribution," said Jordan Rohan, an equity analyst at Wit Capital. "They can afford to wait and invest for the long term."
The company is already licking its wounds from Pathfinder's demise and has become less willing than many of its competitors to stick out its neck.
Media and entertainment giants Disney and NBC have made major investments in Web portals Infoseek and Snap, with lackluster results. Snap is a joint venture between NBC and CNET, publisher of News.com.
CBS has made deep investments in several Web companies, including SportsLine, MarketWatch, and Medscape, but has not created a central site for all of its properties. And Viacom, which agreed to acquire CBS, recently formed MTV Interactive and plans to launch a children's site, code-named "Project Nozzle"; the media giant says it will spin off both properties.
While these competitors have moved quickly to capitalize on the high demand for Internet stocks, Time Warner has remained noncommittal.
David Simons, managing director of research firm Digital Video Investments, said that despite the huge stakes in Web companies that other media companies have taken, they do not have much to show.
"[Time Warner] hasn't gone and done a Disney with a Go strategy, which has so far proven to be pretty impotent," Simons said. "Ditto on NBC and Snap."
Simons added that it's no longer about media companies buying Web portals, because that game has already been won.
"I do believe that Time Warner, after its experience with Pathfinder and seeing the experience with Snap and Go, is rightful to question whether major media should be competing in the portal space with Yahoo directly," he said.