Steve Case resigns as AOL Time Warner chair

Last Updated: Thursday, December 4, 2003 | 8:38 AM ET

CBC News

Steve Case, the man who co-founded America Online and then engineered its merger with Time Warner to form the world's largest media empire, has announced his resignation as chairman of AOL Time Warner (NYSE:AOL) .

Case notified the board of his decision on the weekend. His resignation will be effective in May.

Case said he will remain as a director of AOL Time Warner and will remain as co-chair of the company's strategy committee.

Steve Case

"I believed in America Online when we built it; I believed in AOL Time Warner when we created it; and I continue to believe in the great potential of this company and its people," Case said in a statement. "While my role will change, my enthusiasm for what this company can accomplish won't diminish."

The $106 billion US merger of America Online and Time Warner was one of the biggest business stories of 2000. It was, after all, the biggest merger in history.

• FROM Jan. 10. 2000: AOL, Time Warner in media mega-merger

But the collapse of Internet advertising and the difficulty in squeezing benefits from the convergence led to a steady drop in the stock price of AOL Time Warner.

America Online stock was just over $72 US in January 2000 when Case stunned the business world with news that he would acquire Time Warner. Now, AOL Time Warner stock trades below $15 US. A steady succession of executives has left the firm recently amid loud shareholder complaints about the poor performance of the merged company.

Case acknowledged that shareholder pressure was one of the reasons for his decision to leave. "Given that some shareholders continue to focus their disappointment with the company's post-merger performance on me personally, I have concluded that we should take steps now to avoid the possibility of that effort hindering our ability to pull together as a team and focus fully on our businesses," Case said.

Last week, reports said AOL Time Warner would post a $10 billion US write-down to account for the decline in its America Online business.

Case, who is 44, launched America Online back in 1985 and built it into the world's biggest Internet service provider with 35 million subscribers worldwide.