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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Brian Sullivan who wrote (41298)	9/18/2002 12:17:58 PM
From: Brian Sullivan	Read Replies (1) \| Respond to of 41369

Three AOL bigwigs including Ted Turner target Case usatoday.com NEW YORK — Three of AOL Time Warner's biggest shareholders, including Vice Chairman Ted Turner, have launched a campaign to expel Chairman Steve Case and give his job to another board member — possibly Turner — according to people close to the company. Turner and Capital Research Group's Gordon Crawford are leading the effort with support from Liberty Media's John Malone. They collectively control more than 10% of AOL Time Warner. Odds are low that directors will overthrow Case at a regularly scheduled meeting here Thursday. Foes would need the votes of at least 11 of the 14 board members under its bylaws. Crawford and Malone are not on the board. And Case is digging in his heels. He's expected to plead his case in meetings he has scheduled with institutional investors. He has positioned himself as a long-term strategist, while CEO Richard Parsons focuses on daily matters. AOL Time Warner, for its part, says "there's no basis whatsoever to these rumors, and Steve Case isn't going anywhere," according to spokeswoman Tricia Primrose. Yet, Case's foes think he might change his mind if a board majority wants him out. Ex-CEO Gerald Levin decided in December to leave after losing board support, even though his opponents probably didn't have the votes to fire him. Turner, Crawford and Malone pose a formidable threat. They've been allies since cable's early days and are friendly with Parsons. They're telling others that it's hard to see Case's contributions to the company. And they believe the presence of the former head of America Online might impede efforts to overhaul the Internet service, where ad sales have fallen and subscriber growth has slowed. They also note the cocky culture he cultivated there contributed to the aggressive accounting under investigation by the Justice Department and the Securities and Exchange Commission. Their complaints will resonate with investors. AOL's stock price has plummeted nearly 62%. Case "does not serve a useful function," says Vogel Capital Management's Hal Vogel. "We don't need his five- or 10-year visions." Doug Kass, whose hedge fund Seabreeze Partners is a large AOL holder, says that "there's a great deal of animosity on the Time Warner side that they got (cheated) into exchanging real cash flow for fantasy stock. (Case) is like a bad penny they want to get rid of." But some stock analysts say they don't think the timing is right yet. "Dick Parsons is doing a good job of managing a very difficult transition," says Gerard Klauer Mattison's Jeffrey Logsdon. "To add one more big change at this time complicates the transition process." If Turner became chairman it would be a remarkable comeback. Last year he almost left after Levin and Case stripped most of his power. When Parsons took over, he persuaded Turner to stay.