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Last week's merger of Time Warner and AOL spawned comparisons between CEOs Gerald Levin and Steve Case (60-year-old Levin is shrewder, they say, but 41-year-old Case is the stud). Then there was the inevitable story of how the pair met last fall in Paris, only to become 'inseparable' after Shanghai. But there is another man whose chemistry with Case helped make the merger possible: the ubiquitous Walter Isaacson, managing editor of Time magazine.
The two boomers met in the spring of 1993, sources say, when Case came to New York to pitch the idea of putting Time content online. Back then, AOL had a cool interface and real-time chat rooms, but only 350,000 subscribers, which was nothing compared to Prodigy and CompuServe.
Case must have known that, as soon as he made a bid, Time Inc. would turn around and solicit more money from CompuServe. Isaacson was leaning toward the higher bid, one source says, but when it came down to the wire, Isaacson put his cards on Case. It wasn't just because he liked the guy. "To give Walter credit, he looked around and said, 'AOL understands; it's got a Web ethic,' " says the source. Going with AOL was risky, but it turned out to be prescient.
Time debuted online in September 1993. Among the offerings: the complete text of the latest issue, uploaded by 3 p.m. Sunday; back issues; downloadable photos; and message boards connecting to writers and editors. The reaction was mixed. One user posted: "Just when you thought AOL was apart from the Boomer-dominated, homogenized mass media, in comes Time." But Case loved the content. Says one source, "It was exactly what he wanted."
As editor of Time Online, Time chose staff writer Philip Elmer-DeWitt. Elmer-DeWitt was a longtime member of the WELL, the West Coast pioneer of the online community. After the writer gave the WELL a preview of his 1993 story on cyberpunk, it became a topic of discussion for weeks. And there was no doubt Time wanted to piggyback on the electronic elite: Tom Mandel, the new host of Time's bulletin board, caught the company's attention by generating more WELL messages than any other WELL member in the previous three years.
Meanwhile, CompuServe was looking to boost its content, and in the summer of 1994, when AOL's contract was up for renewal, CompuServe offered Time Inc. a rumored $3 million for the content rights to Sports Illustrated, People, and Fortune. Even though CompuServe had outbid AOL by "more than a million," says one source, colleagues were stunned when Time broke with AOL, and some told Isaacson it was a mistake. "His feeling was the days of proprietary services were numbered."
Apparently Case didn't take it personallyafter all, as one person points out, "Case was paying Time as little as he could." But according to one source, Case now likes to joke that the day Time Inc. made a deal with CompuServe was the day he decided to buy CompuServe. He did so three years later.
In the fall of 1994, the AOL-Time relationship degenerated. "It was friendly, but not going anywhere," recalls one source. "There was sniping back and forth." The problem: Time CEO Levin had decided that Time Inc. needed its own presence on the Web, a site that would link up the contents of all the company's magazines. To that end, Time began to build Pathfinder.com. The company would still sell content to proprietary services, but not exclusively.
AOL execs had a very different idea: They would buy exclusive rights to all of Time Inc.'s content in digital form. One source reports that at a meeting that fall, AOL president Ted Leonsis offered Time reps "big money" for an exclusive deal. Isaacson "turned them down cold," says the sourceand that was apparently the day Case decided to buy Time.
Obviously, the personal relationships survived. It probably didn't hurt that in September 1997, just after Case bought CompuServe, Time ran a 4000-word story praising the AOL chief as "brilliant" and a "visionary." It would be another year before Time Inc. struck a new content deal with AOL. But Time and AOL reps never stopped talking about possible dealswhich may be why the companies were able to keep the latest one such a secret. "I don't think Walter ever fell out of love with Steve Case," says one source. "He just underestimated him."
A spokesman for Case did not return calls, and Isaacson declined to comment.
But was it strategic for Novak to conceal the fact that New York investment banker Richard Gilder, who runs the Club for Growth, is also his broker?
Since the early 1980s, Gilder has presided over a group of self-made businessmen who originally called themselves the "Political Club for Growth." In addition to attending seminars, club members make contributions to handpicked candidates and causes. For example, by 1997, Gilder had given $310,000 to GOPAC, Newt Gingrich's political action committee.
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