It’s No Act--Case Is an Ordinary Guy

In two decades Steve Case has skyrocketed from Pizza Hut manager to Internet promoter and now finds himself one of the nation’s top media moguls, after engineering the biggest blockbuster corporate merger proposal in history.

Case, 41, hardly fits the typical flamboyant profile of a media kingpin. Yet that’s just the perch Case would assume as his No. 1 Internet company, America Online Inc., prepares to acquire Time Warner Inc. for a stunning $163.4 billion in AOL stock.

Case, who initiated the merger talks, would be chairman of the new AOL Time Warner, while Gerald Levin, 60, Time Warner’s chairman and chief executive, would be CEO of the combined company.

Compared with the oft-quoted media personalities like News Corp.’s Rupert Murdoch and cable magnate and Time Warner stockholder Ted Turner, Case--AOL’s chairman and chief executive--is downright ordinary.

He’s a Hawaii native with boyish looks who most days prefers polo and Hawaiian shirts and khaki pants, although for Monday’s announcement he was the one who wore a suit and tie while Levin was sans tie at their news conference.

Case, whose current AOL stake is worth about $1.3 billion, works to maintain the appearance of the common man--being accessible to co-workers, eating in the company cafeteria, not pounding his fists or swearing at staff meetings.

Even AOL’s headquarters, in Dulles, Va., speaks to Case’s attitude that an Internet or media giant doesn’t have to be based in the Silicon Valley, Hollywood or New York City. AOL’s presence there, in fact, has helped the Washington suburb become a burgeoning high-tech citadel.

Yet for Case, being anything but ostentatious or overbearing isn’t an act--it comes naturally, observers said.

“He’s got his ego, but compared to them [other media titans] he’s Mr. Nice Guy,” said Kara Swisher, who wrote a 1998 book about America Online called “aol.com: How Steve Case Beat Bill Gates, Nailed the Netheads and Made Millions in the War for the Web.”

Case, in fact, is shy, which “sometimes came off as arrogant and aloof,” Swisher said, though Case also was a rock-band singer in college and still likes to step to the microphone on occasion.

Still unclear is which executive at AOL Time Warner would wield the greatest power. Levin has said nothing about retirement. And Case’s stake in AOL Time Warner would still be dwarfed by those of some of Time Warner’s stockholders, such as Ted Turner, who will wind up with about 10 times more stock than Case.

What is clear is the impact this deal would have on all facets of the Internet and entertainment worlds. “It’s incredible. They’ve created a giant powerhouse here, a deal that enhances every opportunity you could imagine for the future of entertainment on the Internet,” says Sony Music Chairman Thomas D. Mottola.

No one doubts the brains, tenacity and singular vision of Case, who once tinkered with new pizza recipes while working for Pizza Hut before moving into the then-untested world of the Net in the 1980s.

Case didn’t start AOL. In the early 1980s, he took a marketing job at Control Video, which later became Quantum Computer Services, the forerunner to AOL. Case became AOL’s chief executive in 1993.

Case instilled within AOL the driving desire to become the Net’s largest player by creating an online service that was easy for non-techies, like him, to use. He also wanted to offer the widest number of services, from online shopping to mere Internet access.

And his tenacity helped the company overcome not only the voices of naysayers who doubted AOL’s appeal against numerous competitors, but also a variety of in-house glitches and that could have derailed AOL’s growth.

Case, who has a bachelor’s degree in political science, also deserves plaudits for hiring managers much more aggressive than he is in terms of marketing and communications, analysts said.

Those executives spearheaded many of the strategic moves that made AOL the Internet kingpin it is today, with about 22 million subscribers. And the pressure on Case to have the right people in place will be even more important now, as he tries to steer a media/entertainment behemoth.

“Case brought in larger-than-life personalities and has not minded sharing the spotlight,” Swisher said. “He’s firmly in charge, of course, but he shares the power, which is hard to do.”

His AOL recruits included Jan Brandt, AOL’s marketing chief, who led the effort to send out millions of software disks by direct mail to computer users, offering them free trials of AOL in hopes of making them fee-paying members. The flood of disks made for lots of jokes about the ubiquity of AOL’s CD-ROM platters, but the strategy paid off.

Another Case pick who has gotten high marks is Robert Pittman, who helped co-found the MTV music-cable network. Case hired him as president two years ago and Pittman ever since has attacked AOL’s rising expansion costs, thus helping the company turn the profits that have made AOL stand apart from so many loss-ridden Internet players. (Pittman will be a co-chief operating officer of AOL Time Warner.)

The son of a corporate lawyer, Case also made several other acquisitions that broadened AOL’s reach and sharply expanded the number of services it offers. One of its biggest, before the Time Warner pact, was buying the Internet browser giant Netscape Communications last year.

And Case’s steadiness--some might even say blandness--helped AOL pull out of a potentially ruinous crisis in 1996, when the company replaced its per-hour use charges with flat-rate pricing at $19.95 a month.

The shift naturally prompted consumers to spend much more time on AOL’s site, overloading its system and causing massive glitches. The mess made headlines, infuriated customers and AOL’s advertisers and, in the minds of many computer users, made AOL’s an also-ran in Internet service no matter how big it was.

Regulators ultimately forced the company to offer refunds. And in 1998, AOL also agreed to pay $2.6 million to 44 states, including California, to settle allegations that AOL misled consumers about fees and phone rates.

But Case saw the missteps as evidence that AOL was firmly fixed as a key Internet player and thus could justify buying other services to expand its presence as long as its service didn’t suffer like that again.

And to the amazement of many, more and more computer users kept buying AOL’s service despite the earlier debacles and publicity. Ever since, AOL--and its stock price--have steamrollered ahead.

Bloomberg News contributed to this report.