(29 October 2005 8:00 pm)

MUMBAI: It was only a matter of time. America Online founder Steve Case who took a lot of flak for the ill fated merger with Time Warner has announced that he is leaving Time Warner. He has resigned from Warner's board of directors.

He had a major role to play in the disastrous merger between AOL and Time Warner in 2000. Media reports indicate that he will devote more time to his new health care investment company, Revolution.

The merger between Time Warner and America Online left a bad taste in the mouth for the old guards at Time Warner. Not surprising considering that it resulted in in loses to the tune of $100 billion which is more than what the world's most valuable media company Google is worth. There were shareholder lawsuits and an SEC probe.

Time Warner has meanwhile agreed to pay a combined $510 million to settle shareholder lawsuits and regulatory charges that AOL fraudulently inflated its online advertising revenues and subscriber counts. From a peak of $290 billion when the merger was announced in January 2000, the market value of the new company collapsed by more than half within two years, as the dot-com boom burst. The company also took massive write-downs and in a move to limit PR damage removed AOL from the beginning of its name. It is now believed to be looking to sell a minor stake in AOL to either Google or Yahoo or Microsoft.

Case said, "Leaving Time Warner's board will give me a greater opportunity to grow Revolution, including avoiding any potential conflicts of interest as Revolution moves into new areas.

"As the co-founder of AOL, I continue to have a special pride and passion for AOL, and I strongly believe that AOL -- once the leading internet company in the world -- can return to its past greatness."