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XXXXX DRUDGE REPORT XXXXX SUN JAN 12, 2003 10:59:47 ET XXXXX THE WAY THEY WERE: STEVE CASE AND GERALD LEVIN DISCUSS AOLTIME WARNER MERGER January 11, 2000, Tuesday ABC, GOOD MORNING AMERCIA CHARLES GIBSON, co-host: We are back now with more on the deal, the blockbuster merger of Time Warner and America Online, being called the defining moment for the Internet. Also the biggest deal in history with a price tag of roughly $ 165 million, although you can pick your number. It's going to be a big one. The two biggest players join us now. Steve Case, who will be chairman of the new America Online-Time Warner company, and Gerald Levin, who will be chief executive. And I appreciate both of you coming to join us here. Mr. Levin, you said yesterday, 'We're going to run this company in the public interest.' Why is this in the public interest? Mr. GERALD LEVIN (Chairman & CEO Time Warner): Well, I think there are two reasons, Charlie. First of all, when you look at global communications companies like ours, and the Internet itself, you are of necessity, you have worldwide impact. And you are--the material that you have instructs people, entertains people. Secondly, and probably of co-equal importance, all of us at the new company are really committed to make a difference, so that people understand this is not just about big business. This is not just about money. This is about making a better world for people, because we now have the technology and the instruments to do that. GIBSON: But--but Mr. Case, it is big. And people get a little uneasy when giants merge, when media gets more and more concentrated, and when the people who run all that say, 'You folks out there are going to love this.' Well, we're not all so sure we are going to love it. Mr. STEVE CASE (Chairman &CEO America Online): Well, I think you are going to love it, because what's happening, actually, over the last 20 years is not the concentration of media but the fragmentation of media. Twenty years ago there was three TV networks, now there are dozens, some people have hundreds. Twenty years ago there wasn't an Internet. Now there's thousands of news Web sites all over the world. So 20 years ago people were accessing a few of the magazines of Time Warner, like Time and Life. Now there's tens of thousands of magazines. So there's a lot of special interest publishing, there's a lot of fragmentation. There's far more consumer choice than there ever was before. The challenge is to knit it together so it's--it's--it's convenient for consumers. There's so much out there right now, people are kind of overwhelmed by it. That's one of the things we hope to do, not just for the PC but also on the TV through our AOL TV initiative. GIBSON: But theoretically, Mr. Levin, people like that, like the fact that there's a tremendous fragmentation of voices. And now all of a sudden we have this giant company with, I don't mean this to sound pejorative, but with tentacles in all phases of communication. Mr. LEVIN: It is true, Charlie, that the company touches a lot of people in many different ways. But I think the profound significance of this deal is not, you know, there's a lot of drama, personalities, what it means on Wall Street. It's really a statement that the Internet itself is a profound reality, and what that means--we haven't really absorbed the impact of the Internet. The Internet is a wildly democratic, chaotic source of information. Anybody can be a publisher. I mean, it's the ultimate system. As a matter of fact, it goes worldwide instantaneously. We've never had a networked society, a global network society, and frankly one of the things that our company's going to do, that Steve has already been doing, is to go with this concept of the digital divide, to try and make sure that ultimately those who can't afford it can get it. So we're going to have to change our rhetoric. We're going to have to change the way we think because the Internet is that profound. GIBSON: A couple of things. You can--the Internet, if it has any problems, it's rather slow, it's a little clunky. Time Warner controls cable access to more than 20 percent of this country. You get those cable companies, and cable can deliver the Internet much, much faster. You have been arguing for a long time that there should be open access to cable operations. You are now going to have cable access to 20 percent of the company. Are you pledging that other... Mr. CASE: Oh yeah, we announced that yesterday. GIBSON: ...companies will have open access? Mr. CASE: We announced that yesterday. We believe that the Internet should remain competitive and all the infrastructure players, not just cable, but wireless companies and telephone companies, satellite companies, should make sure that there's competition among Internet providers so that consumers have choice. I think that's very important. We're perfectly happy competing with other companies, because we think we have a wonderful service. We have a brand... GIBSON: And you will allow them access to the cable operations that you now control. Mr. CASE: Well, I don't control anything. But when this merger comes together, we have committed together to make sure consumers have choice as a key component of it. GIBSON: Changes that you're talking about in terms of convergence of Internet and traditional media, they were coming anyway, without this merger, weren't they? Mr. LEVIN: Oh, clearly they were coming. But what this will do will be to accelerate it. And by that I simply mean that we're going to trans--translate the PC experience to the television. The television is the most pervasive instrument that we have, that people use for information and recreation. Now you're going to be able to use what we call full motion video on the television screen just the way you can use your PC. You'll be able to communicate. You'll be able to stop it, pause, get more information, go back, use it to transact. So that it plays the same lifestyle role in, you know, the daily conduct of what you do as the PC, and will actually probably be much easier to use, and faster. GIBSON: Just before we finish, did either one of you pinch yourself last night and say, 'Oh, my goodness, what have we wrought?' Mr. CASE: It certainly did get a lot of attention, a little more than we might have expected. But it's really quite exciting. For a decade we've been trying to--our mission has been to build a medium that really we can be proud of and build something that will have a pervasive impact on people's lives. As much as the telephone or the television would have, and be even more valuable. Now we're expanding because of the convergence of what's happening to telephone, what's happening to television and what's happening on the PC, we really want to change all those things to improve people's lives. Make it more convenient for people to get information, communicate, and buy products and learn things. A very exciting opportunity as we kick off this Internet century. Mr. LEVIN: You know, it's somewhat like when we make a movie or in spring training in baseball, you kind of think you know what you have, but you don't really know until it's been out there. I think it was clear to us that this was a very big idea. Not a big deal, a big idea, but it's probably even more profound than we had anticipated because what's really happening is "the old media company," and I use that with quotation marks, is validating the Internet, and the Internet is validating media and content. GIBSON: Well old fogey, young pup, it is good to have you both with us. Mr. CASE: Thank you. GIBSON: This is going to be very interesting to watch, and I thank you for being here. Mr. LEVIN: Thanks, Charlie. Mr. CASE: Thank you. END |
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