Stephen M. Case
Chairman of the BoardAnnual Meeting of Shareholders
May 17, 2001
I'm Steve Case, Chairman of AOL Time Warner, and on behalf of Jerry Levin, our board and senior management, it's my privilege to welcome you to our first annual shareholders meeting.
It's a special thrill for us to be here at the Apollo. More than just a theater, the Apollo is a living monument to the artists and performers who've not only starred here but who've helped shape the culture and entertainment of America and the world. Under the chairmanship of Dick Parsons, our Co-COO, the Apollo is about to undergo a six-million-dollar restoration. As a result, the Apollo will retake its place as the premier showcase of Harlem, one of this city's and country's most resilient, creative and significant neighborhoods. Speaking for all of AOL Time Warner, I'm proud to say we look forward to being part of the next Harlem renaissance.
Speaking for myself, as a teenager and would-be musician, I once dreamed of performing on this stage. I won't try to fulfill that dream this morning; I'll save it for Amateur Night. The performance that Jerry and I want to spotlight belongs to all of AOL Time Warner. Together, we want to talk to you about both our goals and the progress we're making in realizing them. I'll start the meeting with three items of business.
First, I'll introduce our board.
Second, I'll look at the goals that will define and drive our company as it seeks
to connect, inform and entertain people everywhere in innovative ways that enrich
Third, I'll show a three-minute video that, in a way words can never do, conveys the scope, reach and excitement of AOL Time Warner. When the lights come back on, you'll hear from Jerry.
First, our board. It's been said that strong boards make for strong companies. AOL Time Warner's board represents a level of strength, independence and concern for shareholder value unsurpassed anywhere in business. In addition to Jerry and myself, the directors are:
|•||Dan Akerson - Chairman and CEO of XO Communications and a pioneer of broadband communications.|
|•||Jim Barksdale - Visionary, venture capitalist and general partner of The Barksdale Group.|
|•||Steve Bollenbach - President and CEO of Hilton Hotels and a seasoned veteran of the entertainment industry.|
|•||Frank Caufield - General Partner of Kleiner, Perkins, Caufield & Byers, he joined AOL's board in 1991 and has made significant contributions to its success.|
|•||Miles Gilburne - Principal in ZG Ventures and an astute judge of where the newest and best investment opportunities are emerging.|
|•||Ambassador Carla Hills - Chairman and CEO of Hills & Co., former U.S. Trade Representative and one of the country's top experts in global markets.|
|•||Reuben Mark - Chairman and CEO of Colgate-Palmolive and a leader of the consumer products industry.|
|•||Mike Miles - Former Chairman and CEO of Philip Morris, now a venture capitalist and widely respected independent businessman.|
|•||Ken Novack - Lawyer, intellectual and, not least, Vice Chairman of AOL Time Warner.|
|•||Dick Parsons - Our Co-COO, lawyer, former banker and now in charge of our content operations.|
|•||Bob Pittman - Former President of AOL and now, with Dick, our Co-COO.|
|•||Ted Turner - Our Vice Chairman and—perhaps the first person in history of whom this can truly be said—global citizen.|
|•||Frank Raines - Chairman and CEO of Fannie Mae and former Director of the Office of Management and Budget.|
|•||Fay Vincent - Chairman of Vincent Enterprises. Those of you who watched the recent HBO movie on Mickey Mantle and Roger Maris will recognize Fay as the former Commissioner of Baseball who corrected a long-standing injustice by removing the asterisk from Maris's record.|
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This morning, you'll hear about as well as see the extraordinary range of talent, technology and brands that make up AOL Time Warner. The seamless integration of our operations has gotten us off to a strong start. Yet it's important to remember that we didn't merge simply for the sake of the next quarter or year. We did so because the world has entered an era of startling, insistent change that is drawing people everywhere into an increasingly converged, interactive, interdependent global society. AOL Time Warner is the best-positioned company not merely to profit from that convergence but also to lead it, spreading its benefits as rapidly and widely as possible, and bringing consumers whole new levels of innovation, convenience and competitive choice.
Our ability to realize the full potential of AOL Time Warner and to fulfill our mission of becoming the world's most respected and valued company depends on meeting seven goals. Briefly, I'd like to share them with you.
First, we've got to make the numbers. Though it's not always easy to maintain a long-term outlook and still keep your eye on the day-to-day, both are crucial to our reputation and performance. We will give them equal attention.
Second, we must continue to build a culture which emboldens and energizes our new company. This requires that we think, act and compete as one company. It means building teamwork into our basic values and embedding it in a new compensation system. It means letting go of all that is safe and familiar in order to undertake risks that can move us beyond tweaking existing businesses to creating entire new industries.
In a related way, our third goal—to fundamentally transform the consumer experience—involves this same element of incessant innovation. Just as, internally, convergence requires new ways of planning and executing, so too, externally, in our contact with consumers, we have the opportunity to reinvent how people shop, communicate, inform, educate and entertain themselves.
Consumers are increasingly fascinated with the possibilities digital technology gives them to simplify their lives and amplify their enjoyment. That's the good news. The bad news is that the complexity and confusion of so many different devices in so many different areas also increasingly frustrate them. As always, the trick is to see to it that new technologies are easy to use—saving consumers that most precious human resource—time. Most people feel the same way: they like having a cell phone, a PC, a TV, a PDA but wonder why someone doesn't figure out how to make them work together in an easy, seamless fashion.
Advertisers are equally daunted in reaching consumers in an ever-more fragmented world. One of the reasons nobody has rushed into the breach so far is because it's hard. But as history proves, whether it's been the newsmagazine or talking movies or newsreels or cable TV or 24-hour news networks or interactive services, we've been the company that's connected the dots for consumers and advertisers alike.
Today's opportunity dwarfs anything that has come before. The future of the Internet
is assured. It's moving rapidly through its growing pains and coming into its own.
As the Internet continues to become an ever-more integral and intimate part of people's
lives, the next wave of e-business is already taking shape. Building on our legacy
of innovation, the possibilities for our e-businesses are larger today than yesterday,
and tomorrow they'll be far larger than they are today.
Goal four is: We need to be a truly global company. Many Time Warner franchises and the AOL brand have made inroads in Europe, Asia and Latin America. Still, AOL Time Warner is predominantly an American company. Going forward, we intend for more and more of our revenues to come from our non-U.S. operations, and we intend to make it happen sooner rather than later.
The more global we become, the more goal five is integral to our success: We must attract and keep the diversity of talent and perspectives that supports and enhances our creative and entrepreneurial dynamism. That's true in every phase of our operations. Our success must embody the richness of cultures and peoples whom we either serve or seek to serve. Talent knows no borders of race, gender, nation, language or geography. Neither can we.
Our sixth goal is to strengthen and expand what might be called "our public capital." We're already among the most well-known companies in the world, and the most watched. The impressive list of Oscars, Grammys, Emmys, Peabodys and National Magazine Awards we've accumulated over the years attests to the excellence and prominence of our creative and journalistic output. Time's National Magazine Award in the category of Public Interest and Teen People's for General Excellence are the most recent additions to that list.
Because of that record of achievement, people have higher expectations. They
look to us to set the standard. As I see it, those expectations extend into the
arena of public policy. People expect that we'll help both realize and rationalize
the process of convergence, working to break down barriers to competition and remove
the regulatory schemes that stifle investment and innovation.
Obviously, we believe that we'll benefit from the robust competition that will result. Equally, we know that the ultimate competitive edge is to be a company that is trusted and respected and can be counted on to look to the good of the communities—global as well as local—that it serves and that buy its products. As Jerry has said many times, our company intends to live by the dictum of Henry Luce that this always be a company operated "in the public interest as well as the interests of shareholders."
Which brings me to the seventh and final goal: AOL Time Warner must make a difference. Our determination to make a difference—particularly in the area of education—is based on the concept of 21st-century literacy: We must equip tomorrow's citizens with the traditional and digital skills they need to succeed. This commitment is evident in the AOL Time Warner Foundation, which will spearhead our efforts to stimulate volunteerism and philanthropy throughout our communities. The Foundation believes that media, communications and information technology have an unlimited potential to empower communities and improve people's lives. We will use the full range of AOL Time Warner's capabilities to help unleash that potential.
This year, the Foundation will launch major new initiatives aimed at merging Time Inc.'s commitment to literacy with AOL's commitment to access to technology. The resources and programs that we already have in place prove what can be achieved. AOL Time Warner's Time to Read, for example, is the nation's premier corporate-sponsored literacy program. By the end of this year it will have graduated more than 200,000 learners.
Time Warner Cable has wired more than 90% of the schools in its service area, providing TVs, VCRs and more than 500 hours per month of educational programming and free subscriptions to Cable in the Classroom magazine.
AOL@SCHOOL, which we provide free of charge, has signed up 10,000 e-mail addresses in the past couple of months.
There are other programs and policies I could use to illustrate how important this goal is to us. But in every instance, the ambition is the same. Our mission requires that we be a company that is welcomed and respected wherever it goes; a company whose example of global citizenship gives it a reputation and stature no competitor can hope to match. We've set high goals, I know. Great companies-companies that create new industries and change the world-don't aim low. And though we won't always have the right answers, we'll never stop asking the right questions....
How can we improve?
Where do we want to be in ten years?
What will it take to get us there?
Above all, we'll never lose our consumer focus; or rest on our laurels and fall behind the pace of change; or fail to take the bold risks that brought us where we are today. The history of media and communications in the last century was in good part the result of our company's explorations and innovations. In the century to come, the greatest adventures, discoveries and successes will once again be of our making.
Now please turn your attention to the screen for a speed-of-light video tour of AOL Time Warner today. For those of you listening to the Web Cast, we'll return in a few minutes.