There Must Be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest For the Digital Future

by Kara Swisher

“AOL had found itself at the edge of disaster so frequently that one of its first executives, a brassy Vietnam veteran and restaurateur named Jim Kimsey, had taken the punch line of an old joke popularized by Ronald Reagan and made it into an unlikely mantra for the company. It concerned a very optimistic young boy who happened upon a huge pile of horse manure and began digging excitedly. When someone asked him what he was doing covered in muck, the foolish boy answered brightly, ‘There must be a pony in here somewhere!’” —From the Prologue

If you’re wondering what happened after “a company without assets acquired a company without a clue,” as Kara Swisher wryly writes, it’s time to crack open this trenchant book about the doomed merger of America Online and Time Warner. On a quest to discover how the deal of the century became the messiest merger in history, Swisher delivers a rollicking narrative and a keen analysis of this debacle that is a must-read for anyone who wants to understand what it all means for the digital future. Packed with new revelations and on-the-record interviews with key players, it is the first detailed examination of the merger’s aftermath and also looks forward to what is coming next.

It certainly has not been a pretty picture so far—with $100 billion in losses, a sinking stock price, employees in revolt, and lawsuits galore. As Swisher writes, “It is hard not to feel a bit queasy about the whole sorry mess. . . . It felt a bit like I was watching someone fall down a flight of stairs in slow motion, and every bump and thump made me wince. It made me reassess old ideas and wonder what I had gotten wrong. And it left me deeply confused as to what had happened and, more important, what was coming next.”

For Swisher, finding the answers to what went awry is important because she remains a staunch believer in the digital future—maybe not in the AOL Time Warner merger, but in the essential idea at the heart of it that someday the distinction of old and new media will no longer exist. Borrowing from Winston Churchill, Swisher calls it “the end of the beginning” of the digital revolution. “By that, I mean that it is from the ashes of this bust that the really important companies of the next era will emerge. And that evolution will, I believe, be shaped by what happened—and what is happening now—at AOL Time Warner.”

To figure it all out, Swisher takes her reader on a journey that begins with a portrait of two wildly different corporate cultures and businesses that somehow came to believe, in the crucible of the red-hot Internet era, that they could successfully join forces and achieve unprecedented growth and success. When the merger was announced in early 2000, the irresistible combination was hailed as the new paradigm and its executives—Steve Case, Jerry Levin, Bob Pittman—as popular icons of the future. But after the boom so spectacularly turned to bust and the visions of New Media Supremacy lay in ruins, Swisher searches for clues about where the merger went wrong and who is to blame.

More important, she looks to the future of both AOL Time Warner and the Internet as she seeks to answer the key question that the noise of the disaster has all but drowned out. Will the demise of the AOL Time Warner merger be the final and inevitable chapter of the dot-com debacle or will it herald a new paradigm altogether? This book, then, is a primer for the time to come, using the story of the AOL Time Warner merger as the vehicle to show the troubled journey into the future.

Genres: Business, Nonfiction, History, Audiobook, Cultural, Technology

Audible Audio

First published January 1, 2003

Reviews

[Anthony Eales · Rating 4 out of 5]

I really enjoyed Kara Swisher's accessible but also in the weeds for media and tech junkie's book on the AOL-Time Warner merger. There is echoes in this book of what's happening in the AT&T-Time Warner merger. Obviously not as bad. But mega mergers like these aren't always the smoothest.

Kara puts the spin I've come to know from her with her work at All Things D, Recode, her conferences for The Wall Street Journal & Code as well as recently in The New York Times. Kara is a treasure to the tech industry and I also really enjoyed her appearances in Mike Judge's Silicon Valley on HBO (funnily enough features in this book as the doyen of Time Warner back then as much as now).

Well sourced with often quotations of news articles from the time this book really gives you a sense of what was happening at the time. And makes you ponder for lost opportunities on the stock market as well as the possibility of life ruining losses.

AOL-Time Warner was the most disastrous and biggest merger in history and it really is a fascinating tale with many lessons.

I hope Kara writes another book as it would be getting my money hands down.

[Leew49 · Rating 3 out of 5]

Around the turn of the century, AOL was viewed as a glamorous, forward-looking tech company and one of the real powers of the Internet. Under the leadership of Steve Case it enjoyed ever-growing membership, copious advertising contracts and a high stock value. Its merger with Time-Warner, a mega-corporation of publishing, entertainment, and news, was seen as the wave of the future.

Because of the high value of AOL stock, the younger, non-traditional company became the senior partner in AOL Time-Warner, a fact that was reflected in the makeup of the new managerial staff. But resentment arose almost immediately, driven in part by the different cultures and outlooks of the two companies. AOL and its leaders had an aggressive, confrontational style, exemplified by one of their favorite expressions, "You just don't get it." And Time-Warner, that huge conglomerate, was in fact made up of many separate fiefdoms with their own loyalties and goals. As time passed the much anticipated synergy from the merger never materialized. AOL, a tech company still dependent on dialup technology, never transitioned to broadband, thus losing ground in the competition with other companies like Microsoft. Resentment continued to simmer.

Then the Internet bubble burst, and the stock value--such a big part of the AOL image as an up and comer--dropped. Shareholders and employees--who had sometimes been paid with stock options rather than cash--lost big-time. The stock plunged even further with gradual revelations of unconventional accounting practices by AOL emerged. The new merged company began to get the attention of an increasingly skeptical press, as well as the SEC and the DOJ. After several years Steve Case was booted out of Time-Warner, and the AOL name dropped from the company logo. Now only a subsidiary of Time-Warner, AOL never was able to live up to its original promise.

Kara Swisher has an insider's knowledge, an outsider's skepticism, an acerbic wit and a unique gift for finding exactly the right phrase. Her look back at one of the major corporate missteps of our time manages to be both informative and entertaining.

[Anthony Moreau · Rating 4 out of 5]

A look back at a time that feels like a lifetime ago... and showcases the early, even quaint days, of the burgeoning internet, when we could hardly imagine how it would come to dominate the world.

The events it describes are long forgotten, and that's what really sticks out: there was a future when these hapless executives could have dominated the world wide web. This never came to pass, and it's strange to look at the final chapter, where Swisher talks about how AOL can get back on top.

It was not to be.

[Mark · Rating 3 out of 5]

Not as great for a broad audience, but good for those into tech and media.

[J. Fakename · Rating 3 out of 5]

Wonder if Kara Swisher goes “swish!” when she files a piece. The amount of hope she gives AOL at the end of this 2003 book is heartbreaking.

[Thaths · Rating 1 out of 5]

This books appears to be ghost written (one presumes based on interviews with Ms Swisher) by someone else. I could not stand how repetitive it was, and couldn't finish it.

[Michael Picot · Rating 3 out of 5]

I enjoyed reading this book even though it was about events that occurred over a decade ago. It was very interesting to read about this well-known debacle in American business history. There is a lot to learn from the AOL Time Warner merger. One thing I noted was that just because this merger did not work out doesn't mean some of the main players weren't visionary in many regards. I think people like Jerry Levin and Steve Case were ahead of their time with some of their ideas. The main failure is just that they weren't able to execute on those ideas effectively. It was intriguing how some of the ideas they had and weren't able to execute are things that others have been able to create and capitalize on since then. It was also interesting to read how some technologies, services and applications that even the author thought would always have a place in online society have since disappeared almost completely, such as dial-up.

[Joseph · Rating 3 out of 5]

There Must Be a Pony uses a great approach with the author's personal observations combined with other coverage from the NY Times, Wall Street Journal, the New Yorker, and other publications. The book has much verve that arises from the author's somewhat snarky narrative describing the people and events surrounding the merger of AOL and Time Warner.

The book doesn't seem as well-researched or as exhaustive in terms of interviews and subjects as other books on the time period or subject matter. Instead, the book depends more on opinion and attitude which, in turn, makes the book more entertaining than informative.

The epilogue is a dissection of AOL Time Warner's business. This is curious as up until that point, the book read more as a tell-all than a business case study.

[Michael · Rating 4 out of 5]

It’s abjectly hilarious reading this book in late 2025, as yet another company has acquired and now is attempting to cast off Warner Brothers. One day, a book will be written that catalogues the last 20 years of nonsense surrounding this company and its forefathers, and the author of that treatise will no doubt start their research with this book.

It is somewhat difficult to keep all the names straight in this book, and reading it suffers as a result of the kind of “wait, who is that again?” that one is bound to do when you don’t know these people. I wonder if that was not a problem when it was written, but being so removed from these people there names are utterly meaningless to me (which is perhaps a greater indictment of these people than even this book is).

[Kara · Rating 4 out of 5]

I read Kara swisher's book AOL.com prior to me going to work for AOL, and then I read this immediately after I got laid off! It's a good book and it talks about all the different reasons why the merger wasn't what it should have been - to Time Warner, to the share holders, and most importantly, to the customers. At the end of the day, AOL lied about how much it was making, and they made off like bandits. And now TWC is stuck holding the red-headed bastard step child that defeats them no matter what they try to do with it.

[Ed · Rating 3 out of 5]

Author Kara Swisher writing with Lisa Dickey has produced a very thorough tome about the background and results of the AOL/Time Warner merger. It's a dreary tale though because there is no good news to be had. Apparently, the merger was an unmitigated disaster.

338.7 - Recorded version - subtitled: the AOL Time Warner Debacle and the quest for the digital future. A look at the personages involved in the build-up of AOL and the merger of AOL with Time-Warner, the biggest merger in history at the time, and the results of the culture clash that ensued during the dot-com bursting bubble.