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BOOK REVIEW

Sifting rubble of AOL Time Warner for breaths of life

There Must be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest for a Digital Future, by Kara Swisher with Lisa Dickey, Crown, 320 pp., $24.95

AOL Time Warner Inc. last week owned up to the folly of the January 2001 takeover of the fabled publishing and entertainment giant by America Online at the peak of dot-com mania, as its directors voted to scrub "AOL" from its corporate moniker. If belated, it was finally a key acknowledgement of how nutty it was that a dial-up Internet service collecting $1 of every $5 the company makes came to get top billing and commanding influence in the merger.

Following Washington Post reporter Alec Klein's "Stealing Time," Wall Street Journal "Boomtown" columnist Kara Swisher and contributor Lisa Dickey have put together the summer's second book on this $115 billion "deal of the new century" turned fiasco. Swisher and Klein recount many of the same themes and suggest that AOL's Steve Case must rank as one of history's shrewdest deal-makers, trading in bubble-inflated AOL stock for an iconic, cash-cow media giant just before the bubble burst.

Swisher's book, however, has far more empathy for the key people involved, making it ultimately more readable and insightful, if perhaps too kind. Klein cobbles together episode after episode of AOL venality and perfidy in the manner of a prosecutor's multicount indictment. Swisher narrates human foible and brilliance, a train-wreck tale brightened by plenty of personality -- including her own, sparkling through in laugh-out-loud observations on almost every page.

Early on, Swisher admits she shares the vision that motivated Time Warner chief Gerald M. Levin to hook up with AOL and stay with the marriage plans even as AOL's stock began to tank in later 2000. "I still believe we're at the very start of realizing the promise of the many technical innovations that burst on the scene at the end of the last century," she writes.

While Levin remains hated by Time Warner employees with eviscerated 401(k) plans, Swisher usefully details why teaming with AOL held such appeal after Time Warner's protracted struggles to figure out the Internet.

"Time Warner just lost its ability to say no to the Net, and that was exactly the moment when Jerry Levin met Steve Case," an adviser to Levin tells Swisher. Swisher gives as much scrutiny to AOL's excesses as to the often-glossed-over dysfunctions of Time Warner, whose executives compared themselves to Nazi-occupied Paris after the merger. "The top ranks of AOL considered Time Warner a culture that didn't care to change, where the executive credo seemed to be, `Deny, delay, and retire.' . . . This was, after all, a company that included fussy recording-industry mandarins, egomaniacal Hollywood movie moguls, grumpy journalists, and, well, Ted Turner."

As a tour guide to dot-com madness, Swisher is charming. She recounts moving from Washington to cover the Silicon Valley story in 1997 and "hating the entire idea of California, if not California itself. Here, it seemed to me, was where the seeds of insanity are often planted and where disasters are a daily event."

Swisher concludes with recommendations for the company's future, some insightful, some showing why journalists shouldn't try to be CEOs. Her 13-point blueprint urges AOL to take a big role in offering simplified WiFi wireless net access and offer loyal customers more rewards, like airline miles and store discounts, instead of milking them. What clearly comes from her heart is urging AOL to hire more of the "dreamers" that catapulted its growth in the 1990s, because, Swisher writes, "I believe that the Internet is still underhyped."

Peter J. Howe can be reached at howe@globe.com.

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