Brainfood: History Lessons - Mismatched Mergers - Steve Case

As co-founder and CEO of America Online, Steve Case was one of the architects of the firm's astounding $166 billion merger with media behemoth Time Warner in 2000. But this 'clicks-and-mortar' deal was a marriage made in hell.

The two parties had nothing in common - the groom a geeky young upstart, the bride an experienced older woman. Until then, Case's judgment had been exemplary. By 1996, AOL had 4.6 million subscribers and, two years later, it smartly bought CompuServe and Netscape. But AOL's surprise match with Time Warner left the business community gawping in disbelief. Had the start-up overreached itself? How could techies work alongside creatives? Doubt yielded to worry. The honeymoon ended prematurely - shortly after the deal, shares in the group slumped by 75%. Case resigned as CEO in 2003, and the firm quietly dropped AOL from its moniker. Last month, Case left Time Warner for good. In the present hot M&A climate, it's a salutary tale.

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