In April, speaking to a group of M.B.A. students, Parsons said offhandedly, "I'm desperately in need of a strategy." He was joking, but to those in the know, it wasn't all that funny (unless you'd shorted the stock ages ago). AOL Time Warner is in peril and insiders report that the company's top executives can't agree on how to go about saving it.

Power Failure

Yes, the merger of AOL and Time Warner created the world's largest media company. It also produced a corporate civil war, a 70 percent drop in the stock value, one of the biggest write-offs ($54 billion) in history, and the "early retirement" of Gerald Levin. Now an uneasy troika—new CEO Richard Parsons, chairman Steve Case, and COO Bob Pittman—is scrambling to reboot. NINA MUNK investigates. 

In the fall of 2001, at an otherwise ordinary meeting of AOL Time Warner's board of directors, Ted Turner blew up. Banging his fist on the long conference table, yelling for all he was worth (which was less each day), Turner, AOL Time Warner's largest individual shareholder, turned on chief executive officer Gerald Levin, accusing him of incompetence and negligence. Levin, Turner alleged, had destroyed the company—personally. He had demoralized its employees. He had encouraged rivalry between divisions. Raging, Turner loudly reminded the 15 other directors of one hard fact: in just four months, AOL Time Warner's stock price had been halved. Now, Turner insisted, the board had to intervene. Jerry Levin had to be fired.

Turner's outburst was followed by silence. According to an insider with knowledge of the meeting, not one of the assembled AOL Time Warner directors defended Levin, not even Levin himself. Seemingly unruffled, his thin face expressionless, his narrow shoulders bent, Levin didn't respond. As though nothing unusual had just occurred at the Rockefeller Center headquarters of the world's most powerful media and entertainment company, the next item on the agenda was introduced.

By all accounts, it was an extraordinary moment. "Shocking" is the adjective used by the insider. In a nutshell, I was told, "it was like realizing the emperor has no clothes." Turner's direct attack on Levin that day forced AOL Time Warner's board of directors to see the obvious: Levin had to be replaced, fast. Reacting quickly, AOL Time Warner's chairman, Steve Case, gathered together his loyal lieutenants. By November a plot was being hatched to get rid of Levin and yet help him salvage his ego. By the time Case, 43, confronted the 62-year-old Levin privately, it was all over. This just isn't working, Case told him. Levin apparently agreed.

On December 5, 2001, seemingly out of the blue, Levin made a stunning announcement: he intended to take early retirement; as of May 2002 he would no longer be C.E.O. of AOL Time Warner. That same evening, interviewed on CNN's Lou Dobbs Moneyline, Levin talked about his reasons for leaving the company. Nothing was said about his being pushed out. "I need to find out—people should understand—I'm not just a C.E.O. corporate person," Levin said. "I am a real human being. I have strong feelings about things." Sounding from time to time as though he were talking to Oprah Winfrey, even appearing to be on the verge of tears, Levin made a public confession: "I want the poetry back in my life."

Professing poetry is not out of character for Levin, who recently turned 63. Dropped into the few interviews he's granted over the years are learned allusions: to the Bible, to Albert Camus, and, in an interview with Architectural Digest, to Heracleitus, the pre-Socratic philosopher. Nevertheless, despite Levin's philosophical leanings—and despite his testimony that September 11 had reopened the wound left by the 1997 murder of his son, Jonathan—plenty of informed people weren't buying the stories about needing to reclaim his individuality. After all, only a few months earlier, he had said on CNN's Larry King Live, "At some point, I'm going to retire. But not in the near future. I love what I do." In fact, one well-connected source told me Levin had recently asked the AOL Time Warner board to extend his contract.

Still, for months, no one at AOL Time Warner let slip the real reasons behind Levin's sudden departure (though no one I spoke to flatly denied the story, either). This past January, for example, when I interviewed AOL Time Warner's C.E.O.-elect, Richard Parsons, 53, in the clutter of his huge corner office, he artfully dodged the question of whether Levin had been forced out. Elegant in a pale-blue shirt and banker's suspenders, Parsons leaned way back in his chair. "We live in a world where people are always going to speculate about everything," he said, displaying the easy charm he's well known for. "So when people say to me, 'Hey, is there any truth to the rumors?' I just say, 'Hey, they're rumors,' and I move on."

In late April, still being given the runaround by officials at AOL Time Warner& (Levin and Turner both turned down my numerous and persistent requests for interviews) I called the home of Francis "Fay" Vincent, the former commissioner of baseball; he's an old friend of Levin's and a director of AOL Time Warner. Couldn't he tell me more about Ted Turner's outburst at that fall board meeting and how it had precipitated Levin's departure as C.E.O.? "I can hardly remember that," Vincent answered. "There were so many Ted Turner tirades." Before I could ask another question, he was off the phone.

Misleading reporters and shareholders; glossing over poor financial results; withholding news that might destabilize the stock price. As someone close to the AOL Time Warner board told me in awe, "I've never seen anything go so smoothly. The press swallowed it whole." What they "swallowed" that time was the story about Levin's pursuit of poetry and his search for true meaning. But what about the deal that joined AOL and Time Warner in the first place?

Talk about things' going smoothly and the media's swallowing bait: when AOL announced that it was buying Time Warner in January 2000, the press reached for hyperbole. The biggest acquisition in history, it was a "transformational event," "a fusion of guts and glory," an "awesome megadeal," and so on, in fawning business-press-speak. Levin and Case, impressed by the magnitude and daring of their big deal, promised shareholders that in 2001, its first year as a combined company, AOL Time Warner's cash flow would climb by 30 percent to $11 billion. Moreover, Levin confidently assured reporters and Wall Street that cash flow would continue to climb by 25 percent a year thereafter. Steve Case, the all-American-looking C.E.O. of AOL, stretched his imagination, too, saying that he intended for AOL Time Warner to be the world's biggest company within five years—bigger than Microsoft and General Electric, among others—as measured by stock-market value.

Indisputably, AOL Time Warner is the world's biggest and most powerful media company. Its assets include Warner Bros. Pictures and New Line Cinema. The company also owns Time Inc., the country's largest consumer-magazine publisher (whose titles include Time, Sports Illustrated, People, Fortune, and InStyle); AOL, the world's largest Internet-service provider; Time Warner Cable, the country's second-largest cable system; the Warner Music Group (whose acts include Missy Elliot, Staind, Enya, Linkin Park, and Madonna); Warner Bros. Television (which produces ER, The West Wing, and Friends); Warner Books; the cable networks CNN, HBO, TNT, and the Cartoon Network; the WB broadcast network; and even a baseball team, the Atlanta Braves.

But owning a collection of high-profile assets is not enough; to make them worth more than the sum of their parts, you need a long-term strategy. When the AOL Time Warner deal was announced, the vision for its future seemed clear and straightforward: Overnight, by tapping into AOL, Time Warner would reach deep into the homes of tens of millions of new customers. As for AOL, it would use Time Warner's high-speed cable lines to deliver to its subscribers Time Warner's branded magazines, books, music, and movies. Together as one, with an awesome 130 million "subscription relationships" in total, AOL Time Warner would be unstoppable.

According to AOL's president, Bob Pittman, who would become co-chief operating officer of the new company, the slow-moving Time Warner would now take off at Internet speed, accelerated by AOL: "All you need to do is put a catalyst to [Time Warner], and in a short period, you can alter the growth rate. The growth rate will be like an Internet company."

Well, Pittman was right, of course: like most Internet companies, AOL Time Warner has a shrinking growth rate. Less than two months after the deal was announced, the stock market peaked and Internet mania was over. Where the stock market once valued the combined companies at an incredible $270 billion, it now values AOL Time Warner at around $80 billion. In mid-May, the stock dipped below $17 a share, an all-time low, down by an astonishing 70 percent since peaking at $58.51 one year ago.

In short, the marriage of Time Warner and AOL is in deep trouble. Aside from a collapsing stock price, the company is hobbled by a massive $28 billion of debt, a shaky credit rating, and a loss of confidence on Wall Street. Its shareholders are angry; its employees have lost faith; some of its big partners in various joint ventures and subsidiaries (including the Newhouse family, owners of this magazine) are looking to get out.

The company's financial results aren't anywhere close to numbers once promised to shareholders by Levin and Case: instead of growing by 30 percent last year, the company's cash flow was up just 18 percent. Meanwhile, the company has been forced to write off an astronomical $54 billion in assets. Plain for all to see, this write-off—one of the biggest in corporate history—revealed just how sharply the value of the company has fallen.

As for the AOL division, the "crown jewel" of AOL Time Warner (Levin's rhetoric) has become the company's millstone: the growth in subscribers to AOL's Internet service is slowing down, and, for the first time ever, revenue from on-line advertising sales is falling. Worse, even after AOL increased its monthly service fee by 9 percent last year, the average amount actually paid by subscribers has barely gone up. That's because the only way AOL can keep adding subscribers is to lure them with months and months of free service.

Can this marriage be saved? In April, speaking to a group of M.B.A. students, Parsons said offhandedly, "I'm desperately in need of a strategy." He was joking, but to those in the know, it wasn't all that funny (unless you'd shorted the stock ages ago). AOL Time Warner is in peril and insiders report that the company's top executives can't agree on how to go about saving it. "There's real tension inside the company about what to do," reports a former AOL Time Warner executive who remains in close contact with his old colleagues. "It's a highly demoralized place." In brief, AOL Time Warner is caught in a kind of corporate civil war.

Even though AOL was buying Time Warner outright, when the deal was announced Levin and Case referred to it as a merger of equals. As evidence, the new board of directors would be composed of eight directors from each company. The executive team would be representative, too: Case was named chairman and Levin was named C.E.O., while Time Warner's Dick Parsons and AOL's Bob Pittman would share the job of chief operating officer. Like much else about AOL Time Warner, this balance of power was a good idea that didn't work.

Levin is not used to moving in a pack. Guarded (to the point of being paranoid, say some who know him well), he has few close advisers. Even his friends concede that he never confides in them. "The truth is, no one is close to Jerry," says someone who has known him for decades. According to Levin's daughter Laura, "Maybe it's shyness, or a reticence to expose himself to people, but he's private in his public persona and to his children too."

Even as a very young man, Levin showed extreme self-discipline and self-control. Born in Philadelphia, where his father was a grocer and his mother taught piano, he was raised in an Orthodox Jewish home. At Haverford College, Levin was elected to Phi Beta Kappa and named class valedictorian. In 1963, he graduated from the University of Pennsylvania Law School. Nine years later, in 1972, he joined Time Inc. to help develop its new pay-TV service, HBO.

Levin spent the next 30 years working his way up and then running what would become AOL Time Warner. As C.E.O., he smartly championed cable systems in the mid-90s, when they were out of favor. But overall, Levin's performance was considered by many unimpressive. Indeed, he weathered so many rumors of his imminent demise, he was often referred to as a "survivor." Michael Fuchs, a former head of both HBO and Warner Music, worked with Levin for 19 years and compares Levin's genius for self-preservation to that of a boxer: "There were fighters–there used to be more in the old days–who fought you in a way that you could never hit them. They had such body movement that if you did get a glove on them it would glance off. They were either keeping you off-balance or able to slip everything that you threw at them."

Back in 1999, when Levin and Case got to know each other at a global business forum in China, they seemed to be well matched. Not unlike Levin, Case is known for his single-mindedness and tenacity. Growing up in Hawaii, he and his brother, Dan, started Case Enterprises when they were still children, selling Christmas cards, seeds, and watches by mail. In 1980, after graduating from Williams College, the alma mater of his father, a corporate lawyer, Case went into marketing and product development, first at Procter & Gamble and then at Pizza Hut.

In 1983, he joined a video-game company that would soon be reborn as Quantum Computer Services, an on-line service provider and AOL's predecessor company. Case was named C.E.O. of AOL in 1992: his genius was positioning it as the nation's most consumer-friendly Internet service. Instead of targeting sophisticated users, Case promoted AOL as the on-line service for the masses.

Just as Levin presents himself as a visionary, Case presents himself as a strategic thinker. Introverted and statesmanlike, he spends more time making speeches about the future of the Internet than dealing with the quotidian. Even before the merger, it was rare to see Case at AOL's headquarters in Dulles, Virginia; instead of speaking face-to-face, he tends to use E-mail.

While Case and Levin were supposed to be focusing on the forest, co-C.O.O.'s Bob Pittman and Dick Parsons were in charge of the trees, managing day-to-day operations. From the beginning, the pair were perceived as rivals, competing to one day take over the top job at AOL Time Warner.

As far as I can tell, it's impossible to find anyone who has a bad word to say about Parsons. He's a born diplomat, a teddy bear, it's said; he's self-effacing and good-humored. Born in Brooklyn, a graduate of the University of Hawaii and then Union University's Albany Law School, Parsons started his career by joining the administration of New York governor Nelson Rockefeller as a legal adviser in 1971. In 1988, Parsons gave up law for business, becoming the C.E.O. of Dime Bancorp. Joining the board of Time Warner in 1991, he was hired by Levin four years later as the company's president. Using his skills as a mediator and a politician, Parsons took the edge off Levin's aloof management style.

But despite Parsons's obvious talents, Pittman was widely considered to be the heir apparent at AOL Time Warner. After the merger, for example, the spotlight fell on Pittman, who in major magazine and newspaper articles was presented as the company's real leader. In part, this may have been fueled by Pittman himself, who is known as a self-promoter. Back in the early 1980s, when he ran MTV, Pittman frequently referred to himself as the music network's "creator," overlooking its other founders. When he was married to the socialite Sandy Hill, his private life was regularly chronicled by gossip columnists. More recently, in a photograph taken by Patrick Demarchelier for Harper's Bazaar, Pittman's new wife, a striking graphic designer named Véronique Choa, posed topless, breast-feeding their baby, Lucy—a New Age version of Madonna and child.

The son of a Methodist pastor, Pittman was born in rural Mississippi. Dropping out of college, he started his work life as a disc jockey, then became a radio programmer. From there, Pittman went on to MTV. Next came a stint at Time Warner, where he ran the company's Six Flags amusement parks, and then a job as C.E.O. of Century 21 Real Estate Corp. Pittman joined AOL in 1996. Brilliantly, he turned Case's fast-growing Internet provider into a branded consumer product, marketing the company as if it were a box of cereal or a can of condensed soup.

In sharp contrast to Case and Levin, Pittman dislikes long-term, dreamy thinking; a practical man, he wants short-term, tangible results. Because of their conflicting personalities and ideologies, Case and Pittman don't get along well, I've been assured by someone who knows them both. Nonetheless, they seem to complement each other. "Steve is a great strategic thinker and Bob can get his arms around an institution and make it work," says James Kimsey, who, as founding C.E.O. of AOL, designated Case to succeed him.

Right away, when the AOL Time Warner deal was announced, Pittman boasted that he would have the various parts of the company working together as one. That was how things had been done at AOL when Pittman, said to be a control freak, ran the show. "Every decision came from high command" is how AOL was explained to me. "It was fast and centralized—really centralized," says David Weiden, a former vice president of AOL. "Pittman would get in the middle of very small decisions," says someone who worked with him closely. "I'd make a decision that I didn't think was a big deal and three days later there'd be a rain of hell on me. Many people lived in a state of terror because of Pittman's tiny micromanagement."

The old Time Warner, by contrast, was known as a loose confederacy, a collection of fiefdoms. Division heads rarely met, and when they did they seldom cooperated with one another. Autonomous, they consulted with headquarters only infrequently. Famously, the Warner Bros. cartoon division balked at licensing the name "Road Runner" to the company's high-speed cable Internet service in 1996. Only after a full year of negotiations was a deal finally reached between the two units.

As soon as he took over as co-C.O.O., Pittman set to work, forcing the new AOL Time Warner to adopt AOL's centralized and interactive culture. No more fiefdoms. Division heads, some of whom had never before spoken to one another, were required to meet every few weeks to discuss ways to work together toward a common goal. Bonuses based on the performance of individual divisions were eliminated; to align the goals of each division with the larger goals of the company, executives would receive stock options instead of bonuses.

Above all, Pittman kept pushing to centralize ad sales. He wanted the company's sales force to promote big multi-divisional deals, selling national advertisers a package of ads that would run across all AOL Time Warner properties–its magazines, its cable-TV channels, its Internet service.

But, despite all the talk of communal ideology, of adopting AOL's "culture," business has continued more or less as usual at Time Warner. Even now, the two sides of the new company barely cooperate. For example, a former mid-level AOL manager told me this: her department started building Web sites for several Time Warner divisions in early 2001. By the summer, as work continued on the sites, no one in her department had actually met anyone at Time Warner face-to-face to discuss the project. By the fall, when she left AOL, the two sides still hadn't spoken.

As for Pittman's efforts to centralize ad sales, Time Warner people are hostile to the idea. After all, why share your best clients—major advertisers that you've spent years wooing—with those upstarts at AOL? "They all talk about integrated positions, but none of them do it," reports an executive at a major advertising agency. "I'd go to Turner Broadcasting and say, 'O.K., I want to do a cross-platform deal,' but they really didn't get AOL and the magazines in line. There was chaos. There was no strategic link, no coordination."

Even seemingly trivial management decisions have been resisted. Consider the directive forcing all 90,000 AOL Time Warner employees to switch to an AOL-based E-mail system. That one mandate has come to symbolize the whole AOL Time Warner deal—smart in theory, a disaster in practice. Originally designed for consumers, AOL E-mail flopped as a corporate tool: it couldn't handle large attachments, it crashed, it randomly locked out users, it kept losing messages. "It was a joke," says a former employee on the subject of AOL E-mail. Finally, a few months ago, after spending nearly a year fiddling with E-mail, the company gave up: from now on each division can choose its own E-mail system.

More and more, like a couple trapped in a rotten marriage, each partner at AOL Time Warner is loudly accusing the other of this and that failing. According to some AOL executives, Time Warner managers, humiliated by the terms of the deal, are deliberately being uncooperative. "They're all pissed off and disgruntled," says an AOL insider. "They're like, 'We let these little Internet pip-squeaks buy us!'"

Look!," a Time Warner executive snapped when I reported that AOLers accuse him and his colleagues of being uncooperative. "Who screwed up here? Not our guys! It's the AOL side that made the mistakes." According to people at Time Warner, the real problem is that AOL executives still behave as though Internet stocks did not crash long ago–as though AOL were still worth more than Time Warner. "Completely arrogant, shockingly arrogant" is how one former employee describes the AOL culture. Time Warner employees like to describe people at AOL as "Moonies" and "inexperienced," according to another source.

In reporting this story, I was caught up in a nasty, high-level whisper campaign: back and forth, in "deep background" conversations, both sides of the company worked furiously to undermine the other. One hostile Time Warner insider compared Case and his devoted AOLers to the blind and brainwashed followers of the cult leader Jim Jones: "Despite all of AOL's problems, Steve Case still drinks his Kool-Aid.... This guy is so wedded to this situation that was maybe viable two or three years ago but has been punctured by everyone in the world by now." On the subject of Parsons—better known for his charm and diplomacy than for steering huge companies through hurricanes and around whirlpools—an AOLer assured me he wouldn't last long as C.E.O. "Caretaker" is the word used to describe Parsons's role in the company by one person with access to Case's thinking.

As for Pittman, now that AOL more than any other division is to blame for hobbling the new company, he is denigrated as a slick salesman around old Time Warner precincts, where he and his colleagues are held in open contempt. "The division guys at Time Warner look at AOL and literally say, 'Fuck you. Get your business in order before you tell me what to do,'" reports a former Time Warner executive who remains close to the company.

The hype surrounding big-time mergers and acquisitions can obscure hard, sober business facts; ego and status can be confused with the bottom line. Case must have grasped the situation in October 1999, when he approached Levin with an offer to buy Time Warner: up front, Case promised that Levin would be C.E.O. of the new, giant company. Having made that painless concession to Levin's ego, he proceeded to take him to the cleaners, as it were. Think about it: America Online—a company not yet 15 years old, with but a single product and with one-fifth the revenue of Time Warner—bought Time Warner.

What timing! Had the deal been negotiated only a few months later, after Internet stocks started to collapse, the situation might well have been reversed, with Time Warner buying AOL. But thanks to Jerry Levin, there was no easy way to wiggle out of the deal's original terms. Usually, corporate acquisitions include a clause known as a "collar": collars protect the acquired company from a drop in the stock price of its buyer. But there was no collar in the AOL Time Warner deal; in itself, that lack illustrates how carelessly, and how casually, Levin negotiated the big deal.

"Who top-ticked the Internet bubble?" a Connecticut hedge-fund manager asked me recently, setting himself up to answer: "Steve Case. Who got left holding the bag? Time Warner shareholders."

Not all shareholders got left holding the same bag. Jerry Levin cashed out $153 million worth of stock options in 2000—and that was before his $11 million salary and bonus. Last year, Dick Parsons followed suit, earning $27 million on his options. Their AOL counterparts have also done quite nicely. Steve Case made $100 million by dumping two million AOL Time Warner shares between February and May of 2001, back in the heyday of relative prosperity and optimism, when the combined company's stock was still trading at just under $50 a share. As for Bob Pittman, he picked up $66 million by selling stock in the company right near its peak.

The rest of AOL Time Warner's 90,000 employees have not been so lucky. At the time of the merger, as part of the great leap forward to adapt AOL's "entrepreneurial culture," they were granted stock options. Those options, known grandly as "founders options," aren't presently worth a bean.

For employees on the Time Warner side, who were forced to give up their generous profit-sharing plan for options, the drop in the stock price has been especially cruel. A former Time Warner executive told me about a conversation with a friend who runs a division of the company: "I asked him, 'How's your business?' And he says, 'Who gives a shit about my business—it's fine. Have you seen the stock price?'"

While Time Warner executives are still waiting for their stock in the company to make them rich, their counterparts at AOL have made more money than Croesus ever had. Many made fortunes on AOL options cashed in during the Internet boom. Time magazine noted in a recent article that many AOLers "spend more time with their toys than at the office." Those toys include vineyards, yachts, charitable foundations, airplanes, and many houses—here, there, and everywhere. Meanwhile, since AOL bought Time Warner, more than 8,000 employees across the company have lost their jobs.

In retrospect, seen through the events of the past six months, Jerry Levin's so-called early retirement was the first clear sign of a breakdown at AOL Time Warner. "Levin spent all his time tinkering with the controls in the engine room when he should have been up on deck watching out for icebergs," a confidant of Case's told me.

Once upon a time, Levin was well known—admired, even—for mastering every aspect of the company in obsessive detail. "He's compulsive about absorbing, learning, sucking in new information," a dazzled AOL Time Warner executive told me last fall. "The other day, in a meeting, he referred to this function on the new AOL 7.0 [software] that lets you listen to Internet radio.... It was bizarre that he'd actually use the thing. A minor AOL function. At home. But that was typical."

Levin's fiddling may have led to his downfall when the merger hit an iceberg. More and more, in the eyes of executives on the AOL side, he seemed isolated and out of touch with reality. "There's no real human connection," says one person who has worked with Levin.

Perhaps most crucially, he alienated Case. As envisioned at the time of the merger, the two men would work closely, devising strategy and thinking big thoughts together. Instead, Levin apparently kept to himself, consulting Case infrequently. As reported late last year by Newsweek, Levin's "imperious tone" annoyed Case. One thing that particularly ticked him off was a gran-diose E-mail that Levin sent last Thanksgiving to AOL Time Warner employees. Although that E-mail outlined the company's guiding principles, Levin had not asked for Case's input.

To be frank, Levin is disliked by many current and former colleagues. Since becoming C.E.O. of Time Warner a decade ago, he has often been perceived not as a sensitive man looking for poetry but as a shrewd operator—shrewd enough to have choreographed the removal of his predecessor, Nick Nicholas, in 1992. Ten years later, Nicholas is still astonished by how smoothly, in his view, Levin conned him. He recalls: "A week before it happened, Levin came into my office and said, 'You know, Nick, I'm completely comfortable with this relationship.' He just came into my office and said it! It was apropos of nothing."

Or consider Levin's relationship with Ted Turner. In October 1996, Time Warner paid approximately $7.5 billion in stock for Turner Broadcasting System. At the press conference announcing the deal, Levin called Turner "my colleague, best friend, and new partner." Less than four years later, in May 2000, Turner was eased out, stripped of his responsibilities for the company's Turner Broadcasting division. Reeling from this betrayal, Turner later told The New Yorker, he felt suicidal. Levin, on the other hand, implied that the change in Turner's job description was a question of semantics. "It doesn't make any difference what our prosaic reporting lines are," he told The New York Times. "What really matters is that [Ted] is there and that he is a transcendent figure."

Turner wasn't fooled by this theological flattery. Last November, during an appearance at a cable-industry trade show, he recalled with amusement Levin's calling him his best friend: "I said, 'I'm your best friend? Jerry, I've never even been in your home. If I'm your best friend, who's your second-best friend? Nick Nicholas?'"

Only a few weeks later, emboldened by Turner's raw contempt for Levin, and determined to turn things around before the extent of the company's problems became public, Steve Case and his closest advisers got rid of Jerry Levin. Explaining why AOL Time Warner needed a new C.E.O., someone close to the board told me: "Jerry was the wrong guy.... You need a leader, someone who inspires a vision."

Surprising those who'd handicapped Pittman as Levin's successor, Dick Parsons was named the new C.E.O. of AOL Time Warner, a decision that was explained to me this way: "He's the one who can keep all the guys on the playground playing nice."

Even if peace can be made on the playground, the company still has to figure out what to do next. Since firing Levin, Case has (reluctantly, I'm told) come back from semi-retirement. Instead of tending to his charitable foundation, vacationing with his wife and children, and caring for his brother, Dan, who is fighting brain cancer, Case is back at work full-time as the company's chairman. In his view, AOL Time Warner should focus narrowly on technology. Without irony, Case still uses such late-1990s terms as "convergence" and "interactivity" to describe his business model. In his unshaken vision of the wonders that will be, AOL will be as central to people's lives as telephones or television sets or microwaves.

Bob Pittman, on the other hand, is impatient. Recently dispatched to Dulles to clean up the mess at AOL, his solution is basic and immediate: the company has to market itself more aggressively; it has to sell many, many more ads, especially on AOL. This was the strategy he had used to build AOL in the first place.

And new C.E.O. Dick Parsons? What's his vision? It's hard to know. At least he had trouble articulating a far-reaching plan for his company during our interview a few months back. When I asked him to describe the big idea, the model justifying the AOL Time Warner merger, he paused, nodding his head thoughtfully. First he outlined his own view: "Putting AOL together with the pre-existing suite of Time Warner businesses is just, you know, kind of the end result of vertical integration."

Then he outlined Steve Case's view: "We need to marry up with all of that kind of content that exists in the Time Warner space and then we need to create a unified platform and we need to sort of drive convergence."

Using the same thick and clotted rhetoric, he then explained how their two visions came together: "It's not like convergence is anything more than the ultimate expression of vertical integration. It's just that instead now we have this big stack, we smoosh it all into one thing." Sensing my bewilderment, perhaps, he added kindly, "Is that too long an answer?"

Who knows? That sort of circular logic and empty business jargon may well be second nature over at AOL Time Warner. Even then, the obvious question to ask is this: Can Parsons, Case, and Pittman agree on how to integrate vertically and to drive convergence and to smoosh it all into one thing, and so on?

For one thing, Case and Pittman are terribly rich; with nothing left to prove, they may not have the motivation and focus to take on a messy salvage job. "We just have to hope that these guys can engage again," a major AOL Time Warner shareholder who is close to both men says, hopefully. "But I don't know if they can."

As recently as the May 16 AOL Time Warner shareholders' meeting, held at the Apollo Theater in Harlem, the company's executives still seemed uncertain of what to do next. Both Parsons and Case spoke at length but said little. Just about the only memorable moment of the two-and-a-half-hour event came when an angry shareholder approached the microphone. "Mr. Parsons," he said, "I hear you up here talking about your vision. You know what? I heard that vision last year. Now I want to see the job done." As the audience applauded, he added: "These are hard-earned dollars we entrusted to you, and you have decimated them. You have completely decimated them."

To students of corporate history, the AOL Time Warner deal strikes a familiar chord. It resonates with the deal whereby Time Inc. bought Warner Communications. This earlier marriage, announced in March 1989, was also greeted with hyperbole and ultimately accepted with resignation.

Originally that marriage was structured as a straightforward merger. Then, out of the blue, Paramount Communications jumped in to make a hostile bid for Time Inc., offering an unbelievable $200 a share–in cash. Time's stock was trading for $126 at the time. But in the face of this windfall, and determined not to be swallowed up by just anyone, and especially not by Paramount's C.E.O., Martin Davis (an unprincipled parvenu, in the view of Time Inc., which liked to think of itself as a classy company), Time's executives made a desperate counterproposal: the company would buy Warner outright, with cash it didn't have.

The Time Warner deal closed on January 10, 1990, more than 12 years ago. For employees and shareholders of Warner Communications, most especially for its C.E.O., Steve Ross, the deal was marvelous: they were paid cash, up front, for their shares. Over at Time Inc., by sorry contrast, almost everyone lost his or her shirt. "Because of that son of a bitch at Paramount, we had to acquire Warner in cash," Henry Luce III, the son of Time Inc.'s founder, told me recently. "That made all of the Warner people rich and all the Time people resentful." Even in the greatest bull market the world has ever known–and may ever know–it would take seven and a half years for Time Warner shares to climb to the equivalent of Paramount's $200-a-share offer. As measured today, since the Warner deal, and despite all the company's expected synergies, its stock has still not outperformed the Standard & Poor's 500 Index.

By the way, one of the lead negotiators on the Time Warner deal was none other than Jerry Levin, the "survivor." He got off that time; this time his luck ran out. At AOL Time Warner headquarters, where all this spring he was marking time, waiting to take his "early retirement" on May 16, Levin had already been forgotten. "When he walks into a meeting now, nobody pays attention to him–they literally don't acknowledge him," marveled one insider in late April. "He's like the walking dead." But don't feel too bad for Levin: right after losing his job as C.E.O., he was made an "adviser" to AOL Time Warner. From now through the end of 2005, he will be paid $1 million a year for his insights.