Underwriting the Internet

Chapter 7 The Bubble Bursts

Arrival of the third millennium was accompanied by the $183 billion merger of America Online with Time Warner, which Business Week hailed as "a new kind of conglomerate whose very existence will likely change the contours of information and entertainment media—digital and otherwise."¹ The magazine's cover featured New Economy titans Bob Pittman and Steve Case—both from AOL—who had created the "colossus" that would "redefine the future." It was not to be. Within four months, fissures in the dot-com boom appeared that implosively led to its $7 trillion collapse. This scarred newly born AOL Time Warner, causing $223 billion of shareholder value to go up in smoke—$8 billion of which was suffered by Ted Turner, its largest ...