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EDITIONS
Thursday, 11 July, 2002, 09:30 GMT 10:30 UK
How to turn around AOL Time Warner
Richard Parsons, AOL Time Warner chief executive
Richard Parsons faces a global media slump

It's a tough time for media and internet companies, and AOL Time Warner, the world's largest, is no exception. Its new boss, Richard Parsons, tells BBC News Online how he hopes to turn things around.
The new boss of AOL Time Warner is something of a mystery.


It's an advantage to be underestimated; if you do your job well, you create the foundation of success

Richard Parsons
For decades the tall bearded man with the gentle smile has avoided publicity.

He knows many of the secrets of Washington and Wall Street and fixed deals for the Rockefellers, the White House and Time Warner, but preferred to do so behind closed doors.

But now AOL Time Warner, the biggest and mightiest media company of the world, is in trouble and its corporate headquarter at Rockefeller Center is calling SOS.

Wanted: A corporate superman

AOL Time Warner's share price has fallen dramatically; its accountants reported a massive loss of $54bn after writing down the value of its assets; debts keep mounting; yet again Microsoft is launching an assault on AOL's internet business.

The new media, old media empire is shaken by the global economic downturn and under threat of falling apart.

First Superman comic
AOL Time Warner needs a corporate superman to steer it through its troubles
Time for Richard Parsons to take the helm as AOL Time Warner's new chief executive.

The challenges facing Mr Parsons are not so much different from the tasks awaiting Superman in the new Warner Brothers Movie production he oversees.

It will take almost supernatural forces to change the course of the internet and media armada with a stock market value of $56bn.

And both the company's 90,000 employees and Wall Street are expecting nothing short of miracles.

But as Mr Parsons tells it to BBC News Online, it all sounds easy: "We want to make some money for the shareholders. We want to do some good in the world and we want to have fun."

An interesting strategy. The 54-year-old Mr Parsons leans back in his chair, smiles and keeps his trademark cool, as if wanting to say: "Don't worry, I have seen bigger ones."

And maybe he has.

The secret of his success

Just four years after graduating from law school he became point man in President Ford's Domestic Council, advising on national policy, helped into the post by his first boss, Nelson Rockefeller.


The potential of this company is frankly to be the most important one in the world

Richard Parsons

Mr Parsons does not like to talk about the challenge of cleaning up the mess left by President Nixon's Watergate scandal, restoring the credibility of the White House, and the aftermath of the Vietnam War.

Instead he says:" I was just 26 years old and it was very heady flying around on Air Force One and discussing national policy with the President."

And what about Washington's web of intrigues?

"I am not an intriguer. I believe in fair play and honesty. Intrigues come back to haunt you. They are not the keys to long lasting success."

So what is his secret of success?

"To keep a low profile. It's an advantage to be underestimated. If you do your job well, you create the foundation of success."

Work hard, party hard

And Richard Parsons always did well.

He likes to outwork others. At school he skipped two years and went to university aged 16.

At law school, he outscored his peers in the final legal exam.

Richard Parsons claims: "I always worked hard, even in my party days. I used to 'out-party' the other guy."

Target: The world's top company

He has a palatial office on the 29th floor of the Rockefeller Center complex. On his massive mahogany desk, there is a stack of documents, weighed down by a large and shining golden key.

Richard Parsons, AOL Time Warner chief executive
Richard Parsons's people skills will be crucial for keeping AOL Time Warner together

But what's the key to make AOL Time Warner a success again?

"My priority is on the people," answers Mr Parsons, whose diplomatic skills prevented the bankruptcy of the Dime Savings bank he chaired before becoming president of Time Warner - before the AOL merger.

Even though Parsons is known for his sharp and tough decisions, most of his employees appear to like him. Some have taken to calling him the "teddy bear".

Parsons explains his people strategy: "If we march in the same direction with the sense of both confidence and purpose, we can accomplish a lot. Just like the five fingers and the fist."

And how does he want to direct the fist?

"I don't have any other personal desires or objectives other than to enable this company to fulfil its potential. And the potential of this company is frankly to be the most important one in the world."

Playing the synergy game

Vivendi Universal may be falling apart, but Mr Parsons believes that AOL Time Warner will continue to expand.

Last autumn its Time subsidiary took over IPC, the number one magazine publisher in the UK, and now holds an armada of 140 magazines.

The Harry Potter franchise brought Warner the magical profit of $1bn.

And AOL - recently much maligned by investors and analysts alike - reaches out for new goals: AOL Music wants to have a bigger impact on the music industry than MTV has had in the past.

"AOL's Music Channel is the number one online music destination. On average one million songs - audio and video - are streamed from AOL Music each day."

And what about other synergies?

Mr Parsons gives examples: "Browsers like Netscape direct traffic to the web pages of Fortune, Time, and CNN etc.

"Promotions of Time magazines on AOL generated 1.15 million new subscriptions in 2001. And Time provided AOL with 800.000 new registrations."

So what are Mr Parson's next targets?

"The best way to predict the future is to invent it. AOL Time Warner reaches billions of people worldwide through a host of megawatt brands including CNN, AOL, Time, People, Sports Illustrated, television networks like HBO and TBS, through our Warner Brothers Studios in Hollywood, and our cable company.

"We are number one or number two in virtually all of our businesses. And now we combine it all - leading the digital revolution."

And there are still growth markets, says Richard Parsons. He recently returned from China, where he closed a major deal.

John Davidson Rockefeller - the founder of the Rockefeller empire - went to China and gave away oil lamps for free. The Chinese wanted to see them burn - and Rockefeller's oil firm was in business.

So what are Richard Parsons' oil lamps?

"We don't give oil lamps to the Chinese, we provide them with internet access.

"We just made a deal with Legend, the largest computer manufacturer in China. They build AOL into their computers, so we can extend access to the internet to more people in China and in Asia."

See also:

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