There Must be a Pony in Here Somewhere

Alex Moskalyuk writes "It was supposed to be a deal of the millennium. When it was leaked to the media from the highest ranks of America Online, the journalists wanted a second source. It was just too incredible to believe, too likely to be a prank. AOL was merging with Time Warner with the terms of the deal making it more of a buyout than an equal merger. In truly Orwellian fashion, two corporations decided to treat one another as equals, although executives of newly formed AOLTW somehow always referred to the AOL part as "innovative" and thus leading into the future, while the TW was "old media" with that implies. Read on for Alex's review of a book about how that deal came to be, as well as its aftermath. There must be a pony in here somewhere author Kara Swisher pages 320 publisher Crown Business rating 6/10 reviewer Alex Moskalyuk ISBN 1400049636 summary The AOL Time Warner debacle and the quest for the digital future

Kara Swisher's There Must be a Pony in Here Somewhere is subtitled "The AOL Time Warner debacle and the quest for the digital future." Debacle is not an over-exaggeration, as the chapters of the book unveil personal, professional, corporate and political dramas happening during the so-called merger. A reporter for The Wall Street Journal, Swisher knows many AOL executives personally, and according to her stories, frequently engaged in lively conversations conducted where else but in AOL Instant Messenger, available on PCs of top management and board members as the preferred means of communication.

The title of the book takes roots from a famous joke, attributed to Ronald Reagan, where a hopeful boy is dealing with a large pile of manure. When asked why he is so insistent about digging the pile with such enthusiasm, the boy replies that with such a pile there "must be a pony in there somewhere." If you read the press lately and followed AOLTW's stock ride, you probably know that the pony wasn't quite there.

It's amazing how many optimistic forecasts and wide smiles were presented to the press and general public on the day of the merger and long after it. The word "synergy" could qualify for the most popular noun of the year, used by AOL executives almost in every sentence.

As Swisher writes on page 18, "Most people involved in the deal seem to be suffering from a peculiar amnesia now, so it's easy to forget that kind of hype and optimism. Today, almost everyone near to this toxic merger runs screaming from it in an attempt to avoid any culpability. The denials come fast and furious: Not me. I wasn't involved. I thought it was wrong from the very beginning. And - most of all - Steve Case is a big, fat loser. This was always more familiar territory for me, since that was exactly how most of the world regarded Case throughout his career. For most of it, he had always and forever been a loser."

Well, you can tell that the author is not sucking up to AOL's ex-CEO.

Swisher's book is extremely personal. Unless you've been involved in AOL or Time Warner personally, you are probably not aware of the company's management. At the time, when executives of Yahoo, eBay and other Silicon Valley startups weren't just visionaries, they were cool, AOL's top management was rather bland and plain. They weren't the cool guys, they were just managing some dial-up ISP in Dulles, VA that somehow took over the United States with its goofy icons, goofy commercials, goofy sounds and likewise membership. The author takes you through the personalities of top managers, talks about the AOL-TW off-standish behavior towards one another, questionable deal and threatening techniques used by David Colburn and AOL's Business Affairs department.

The book is easy to read and is full of interesting details. For example, the day when the deal was announced, there was another company discussing potential merger with AOL. But since everyone was involved on Time Warner deal that was supposed to be "huge," Meg Whitman and eBay crew got almost no attention from America Online, with executives constantly leaving the room and portraying an attention span of five-year-olds. Perhaps if some executives paid more attention to eBay and discuss potential buyout, the Internet would look different nowadays.

Otherwise, the book looks like a classic business study on how failures happen and what to avoid when you are faced with the task of running world's largest media outfit. It's an easy and pleasant read, informative as well as entertaining. Don't expect technical details from it in regards to AOL's operations, load balancing and nationwide dial-up network, since Swisher's main audience is business types and readers interested in details behind the "deal of the millennium". The first chapter of the book is available online on New York Times Web site.

You can read more of Alex's reviews of business and technology titles. You can purchase There Must be a Pony in Here Somewhere from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, carefully read the book review guidelines, then visit the submission page.

Comments

I remember when the merger was announced

[FunWithHeadlines]

...and my jaw literally dropped when I realized it was more AOL buying TW than the other way around. That was when I realized the dot-com boom was very, very real and that things were not the way they were. Time Warner is beyond huge, so to have AOL swoop them up was incredible. I had older relatives who had been in the media business, mostly on the news side, and they were stunned too for they knew how big TW was but had little idea of this new AOL "thing."

Of course it turned out all to be a stock thing. AOL stock, at the time, was high-flying, and TW stock was looked down upon as this underperforming, boring old line stock. AOL would give TW a facelift for the 21st-century, and both sides would benefit from that 90s buzzword "synergy."

Ha! From trying to force TW staffers to switch internal mail systems to the laughable AOL mail system, to conflicts on the board level, to a failure to find true value out of the synergy, and then the stock market collapse, followed by the fleeing of subscribers from AOL, it was not to be. Now AOL/Time-Warner is back to being Time-Warner, the old line guys are getting revenge on the dot-com upstarts, and the whole thing seems like a bad idea gone wrong from the start.

Which it was.

Re:Why 6/10?

[An Onerous Coward]

My old physics teacher once told us a story about how his mathy brain fails to mesh with the rest of the world. He had cable installed. The repairman came in, got him up and running, and left. About a week later, the cable company sent in a survey asking him how the repairman did.

He thought, "Okay, the scale is 1-10, meaning 5 should be around average. I think I got better than average service." Then he proceeded to fill the survey with 7's and 8's.

A couple more weeks go by, and he gets a call from the cable company, apologizing for the poor customer service he received and asking if there was anything they could do to make him feel better.

I'm not totally sure I remember the punchline correctly. However, I think after about forty minutes of trying to explain why "7" wasn't a bad thing under a normal gaussian distribution, he broke down and asked for a month of free cable just to end the phone call.

Re:Steve Case... not a loser in my book

[Anonymous Coward]

Question from the floor:

Who believes that part of the bubble bursting may have stemmed from the AOL/TW merger? TW suddenly realizes "Holy shit, these people just bought us with fake money".

Suddenly, everyone realizes that the impossible has happened (all that fake value has purchased real value) and the system corrects itself by removing all other fake value.

I mean, everyone I know (business and geek alike) knew it was a bubble, but that knowledge didn't burst it. Perhaps it took a real economic incident to convince the 'system' of the problem?