Fools Rush In is the definitive account of one of the greatest fiascos in the history of corporate America: Internet upstart AOL's $163 billion purchase of Time Warner, the world's most powerful media company. With painstaking reporting and a narrative fraught with drama, Vanity Fair writer Nina Munk reveals the overweening ambition and moral posturing that brought down the Deal of the Century. Step by step, Munk lays out the anatomy of the debacle, from the single-minded quest for power that drove Steve Case and Jerry Levin to seal this deal to the backstabbing, personal betrayals and Byzantine politics that destroyed two once-great companies and discredited just about everyone involved with them.
|Publisher:||DIANE Publishing Company|
|Product dimensions:||6.50(w) x 1.50(h) x 9.50(d)|
About the Author
Nina Munk is a contributing editor at Vanity Fair. A former senior writer for Fortune, her work has appeared in the New York Times Magazine, The New Yorker, and Forbes. Born in Canada, she lives in New York City.
Read an Excerpt
Fools Rush In
Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner
By all accounts, Henry Robinson Luce was endowed with moral certainty at birth. Born in 1898 to American missionaries in Tengchow, China, Harry, as he was known, was a precocious and serious-minded child. At the age of five, as a diversion, he delivered religious sermons to his playmates. Later, turning to journalism, which he referred to as a "calling," he wrote: "I believe that I can be of greatest service in journalistic work and can by that way come nearest to the heart of the world." His father had devoted his life to proselytizing; likewise, Harry Luce would set people on the highway to truth. Making money was not his goal, as the terms of Luce's will would later make clear: "Time Incorporated is now, and is expected to continue to be, principally a journalistic enterprise and, as such, an enterprise operated in the public interest as well as in the interest of its stockholders."
When he was fifteen Luce arrived in America to attend Hotchkiss School. From there he went on to Yale. He was an exceptionally gifted student: he wrote poetry; he became assistant managing editor of the Yale Daily News; he graduated summa cum laude; he was admitted to Phi Beta Kappa; and he was voted "Most Brilliant" in his class. Harry Luce was most likely to succeed.
In the early 1920s, while he was working as a reporter at the Baltimore News, Luce, together with a former classmate from Yale, Briton Hadden, decided to start a weekly magazine called Time. A summary of the world's most important news, it would run articles of no more than four hundred words, orseven inches of type; it would also deal "briefly with EVERY HAPPENING OF IMPORTANCE," as Luce and Hadden explained in their prospectus. Unlike the Literary Digest, an existing summary of the news, Time would have a clearly defined point of view: "The Digest, in giving both sides of a question, gives little or no hint as to which side it considers to be right. Time gives both sides, but clearly indicates which side it believes to have the stronger position."
In early 1923, having raised $85,675 from seventy-two investors, Luce and Hadden published their first issue of Time. Only twenty-eight pages long, the entire issue of volume 1, number 1, dated March 3, 1923, could be swallowed and digested in thirty minutes or less. "It was of course not for people who really wanted to be informed," sniffed W. A. Swanberg in his definitive 1972 biography of Luce. "It was for people willing to spend a half-hour to avoid being entirely un-informed."
Those who worked for Time were rewrite men whose job was to shrink and condense articles from The New York Times and New York World, transforming them into "Timestyle," the quirky prose for which Time became famous (or infamous). Together the men invented neologisms telescoped words like "socialite," "cinemaddict," and "guesstimate," for example. They also revived arcane terms such as "tycoon" (Japanese for "great ruler") and "pundit" (Hindi for "learned man"). Deeply in love with adjectival phrases ("To Swanscott came a lank, stern Senator, grey-haired, level-browed"), Luce and Hadden claimed they'd been influenced by Homer's Iliad with its inverted syntax and double-barreled epithets ("white-armed Hera" and "grey-eyed Athena" and "horse-breaking Trojans").
Time was pilloried by intellectuals. Parodying Timestyle for a 1936 profile in The New Yorker, Wolcott Gibbs wrote: "Backwards ran sentences until reeled the mind ... Where it will all end, knows God!"
In 1929, just as Time was becoming successful, Hadden died of a streptococcus infection, and Luce took over, borrowing money to buy Hadden's share of their company. He was thirty-one years old. Before long, Hadden would be a footnote in the history of Time Inc.
With a circulation approaching three hundred thousand, Time was now sufficiently profitable that Luce could afford to expand. Determined to spread his "fantastic faith in the industrial and commercial future of this country," Luce launched Fortune in 1930. Six years later, in late 1936, he introduced his most spectacular success, Life magazine. Its purpose: "To see life; to see the world; to eyewitness great events; to watch the faces of the poor and the gestures of the proud."
Within hours of its arrival at newsstands, Life was sold out all over the country. Struggling to find enough coated paper to meet the demand, Luce couldn't publish enough copies. Even he had never imagined Life would be so popular. After just four weeks, Life's circulation was 533,000; no magazine in American history had passed the half-million mark so quickly.
Sports Illustrated would come next. In contrast with Life, however, Sports Illustrated was not an immediate success. Launched in 1954, when spectator sports were looked down on as fodder for the working classes, Sports Illustrated was ahead of its time. But Luce was fully committed to his new magazine. Before long Sports Illustrated would broaden the appeal of spectator sports and change the way they were covered.
Long before Sports Illustrated had become profitable even before it was launched Luce had become a media baron. By the early 1940s, one in every five Americans was reading a Luce publication. Company revenues were $45 million. Emboldened by the success of his publications, Luce increasingly turned them into vehicles of political and moral propaganda. Money had never motivated Luce, but power did.
In 1941, decrying isolationism, Luce argued that it was time for America, the world's most powerful nation, to fulfill its duty to humanity. The twentieth century, he stated famously in an editorial written for Life, was "the American Century." Americans had to "accept wholeheartedly our duty and our opportunity as the most powerful and vital nation in the world and in consequence to exert upon the world the full impact of our influence, for such purposes as we see fit and by such means as we see fit."Fools Rush In
Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner. Copyright © by Nina Munk. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.
Table of Contents
|Note to Readers||vii|
|Part 1||"Resident Genius": From Time Inc. to Time Warner, 1923-1998|
|Part 2||Enter the Internet Cowboys: AOL, 1985-1999|
|Part 3||The Big Deal: AOL and Time Warner, 1999-2000|
|Part 4||"Surviving is Winning": AOL Time Warner, 2000-2003|
|Notes and Sources||311|